The federal government’s “unprogressive regulations and policies” and complexities caused by revenue drive by the three tiers of government are severely challenging the confidence of the business community on the ease of doing business initiative.
The warning was made on Thursday by the Manufacturers Association of Nigeria (MAN) at its10th edition of its Breakfast Meeting for CEOs and Managing Directors of member-companies in Lagos.
The chairman of MAN, Ikeja branch, Otunba Francis Meshioye, said the regulatory burden foisted on manufacturers by federal, state and local governments were undermining the manufacturing sector’s ability to successfully launch new businesses, expand existing ones, and create jobs. “This generally negates the objectives of the ease of doing business initiative and other reactionary interventions by the federal and state government,” he said.
The theme of the breakfast meeting was: The Nigerian Manufacturing Sector: Current Issues and Strategic Options with special emphasis on The Impact of Legislation, Regulations and Policies on the Ease of Doing Business in Nigeria.
He regretted that despite being the engine of economic growth, the manufacturing sector in Lagos and Nigeria was under siege. “It’s as if politicians and regulators want the sector to collapse,” he said.
Meshioye said although the economy technically exited recession in the second quarter of last year, the exit remains largely volatile, with the manufacturing sector in Lagos still battling to survive the myriad of challenges facing it.
He listed some of the challenges to include the expansion of the list of taxes, levies and fees payable to the state government’s Ministries, Departments and Agencies (MDAs) without consulting stakeholders; the difficulties created by the bottlenecks in the implementation of the harmonised inspection of workshops and traffic gridlock at the ports.
He said these challenges exist alongside other conventional ones such as high interest rates and multiplicity of taxes and levies by MDAs, among others. “These challenges are the resultant effects of legislation, regulations and policies being implemented by the government, which together increase the cost of doing business and the misery index of the citizenry,” he said.
Meshioye, therefore, said manufacturers expect the government to put in place progressive legislations specifically focused on improving existing regulatory policies that will boost the profitability of businesses and ease entry barriers for entrepreneurs.
Dr. Frank Udemba Jacobs, MAN’s president, agreed with Meshioye, noting that manufacturers in Lagos state have in recent times been challenged by the introduction of some tax heads and increment in taxes/levies without consultation with stakeholders who are expected to pay the fees.
Jocobs, who was represented by the association’s council member, Engr. Reginald Odiah, also said despite the state government’s agreement to harmonize inspection of factories and work places, complaints received from MAN members showed that MDAs in the state are yet to implement the agreement.
He also appealed that the over 150 per cent increment in environmental development levy and petroleum storage permit payable to the Lagos State Environmental Protection Agency (LASEPA) be reviewed downward.
The MAN president also pointed out that the biennial review of the Environmental Audit Report by LASEPA as against three yearly review of the same document by the National Environmental Standards and Regulatory Agency (NESREA) was imposing a huge cost on manufacturers.
Jacobs further drew the state government’s attention to the upward review of the land use charge, saying that this has compounded the woes of manufacturers who are already on the verge of collapse on the weight of high operating cost.
He also accused the Lagos State government of not being enthusiastic about patronising made in Nigeria products. “The state government has exhibited high level of reluctance. We appeal that the administration directs a reversal of this trend by ensuring that patronage of made in Nigeria products is enshrined in the procurement policy of the Lagos state government,” he said.