SMEs
How We Can Survive Another Recession
Recent World Bank report has shown that Nigeria’s economy has plunged into recession for the second time in five years.
From 6.0 percent projected, the report shows Nigeria recording a second consecutive negative growth, contracting by 3.62% in the third quarter of 2020.
This week’s edition of “My Business” looks at the effects of the recession on businesses and how the country can work its way out of this terrible decline in economic activities.
Our senior correspondent, Lilian Peters, had a chat with some financial experts and business men in Port Harcourt, who bared their minds on the current situation. Read on.
A chartered accountant and the Managing Consultant of S.O Igwe & Co., Ambassador Silas Igwe, said the major factor that led Nigerian economy to contract was the fall in the price of oil, which is the major source of revenue of the nation.
Igwe who operates a professional auditing and tax management firm noted that oil “in fact generates about 80 percent of our country’s revenue”.
He also said that the effects of COVID-19 made many establishments to shut down operations, thereby denying them cash inflow.
This, he said, also impacted on the country at large, reducing the revenue the country would have generated.
“The truth is that the pandemic affected the economy of many countries including the developed countries and therefore threw them into recession. Some of the affected countries are: Britain, France, Italy, Canada, Germany, United States of America. Britain was the worst hit because their economy contracted by 20.4 percent.
“The recession could not have been prevented by the Nigerian government due to the natural causes but the right action by government can chat a way out.
“Government should adopt bail out to some selected and essential companies. Grant soft loans to the real sectors of the economy, empower households to enable them spend more, thereby stimulating the economy, as well as tackle corruption headlong”, he said.
Amb. Igwe further noted that the way forward for big and small companies would be “diversification of goods and services tendered so as to increase sources of revenue, adopt a competitive pricing policy in their businesses and a good customer relationships.
“There is also the need to reduce cost as much as possible, including overhead cost. Adopt marginal costing approach”.
The Managing Director, Integrated Oil Shore Services Nigerian Limited, Mr Chijioke Samuel Ekeke, in his own view, said the effects of the recession on businesses would be worse than imagined.
“I do not even know when we came out from the first recession. We are confused and business operations had declined due to scarcity of dollar and bit by bit remittance.
“To remit money for purchased tools and equipment, the bank will say only $10 would be paid at a time, even with N470 per dollar”, he said.
Ekeke urged the present administration in the country to fulfill its promises to the nation.
He said the Federal Government’s assurance that the country would exit recession by the first quarter of 2021 was not sacrosanct, explaining that the situation on ground has many unanswered questions.
“The only way forward is for the government to be committed to the masses and work with experts who know what to do in different situations”, he said.
The Managing Director, Isumana Nigerian Limited, Amb. Umana Idongesit Sunday, said the recession affected import, export and currency flow in the country.
Sunday, whose company deals on science and hospital equipments, noted that businesses were passing through harsh economic situation which in turn affected the country’s revenue generation.
He noted that, “Businesses are facing serious challenges under the present economic recession in the country caused by Coronavirus and other unmanageable issues.
“No currency flow, no foreign reserve, to boost the economy and no free flow of businesses.
“We import at a very high cost, supply at a high cost to the hospitals who in turn demand the recovery of their money from their patients”.
He commended the Federal Government’s initiative in the area of agriculture, especially the production and packaging of local rice to compete with foreign ones, he said more needs to be done in the area of infrastructural development and power supply.
“Without good road network and power supply, the cost of finished products would still be high. The rail system needs to work and the price of fuel has to come down to reduce transportation”, he said.
For a quick recovery from recession, Sunday urged the government to stimulate the informal sector to generate more jobs, while interest free loans are given to boost small and medium enterprises.
“Government should put round pegs in round holes. The use of experts in their respective fields would go a long way in helping us exit the situation we find ourselves.
“If government would leave party sentiment, tribalism, and pick qualified economic experts, then our recovery would be near”, he added.
SMEs
Real Estate Firm Trains 350 Youths
A real estate firm, Adozilion Homes and Realty, has trained 350 young men and women in real estate entrepreneurship.
The week-long training was held during a seminar themed “Eklisia Realtors Conference”, which was held in Lagos.
In a statement, the Chief Executive Officer of Adozilion Homes and Realty, Dr Adozi Simon, said the conference was aimed at equipping young realtors with the knowledge and tools needed to thrive in the dynamic Nigerian real estate market.
Simon said, “There is a very critical housing deficit in Nigeria. Millions lack adequate shelter, and bridging this gap requires innovative solutions and partnerships”.
He explained that Adozillion Homes and Realty organised the event to empower and transform 350 young entrepreneurs and give them the necessary knowledge to excel in the real estate sector.
He added, “We believe in empowering realtors and recognising excellence to contribute to the growth and success of the entire industry, and that is why we have trained and empowered over 350 of you young men and women at this conference.
”The future of the Nigerian housing industry lies in collaboration, innovation, and commitment to inclusivity”.
He also highlighted the need for collaboration with the government to drive regulation, quality, transparency, and accountability.
Meanwhile, the Board Chairman of Adozillion Homes and Realty, Dr Sam Egube, acknowledged the challenges of rising cost of land, limited access to finance, and inadequate infrastructure in the country.
He urged realtors to be intentional in their approach and collaborate effectively.
Dr Egube said, “The poor is the man who thinks receiving is his only way out of poverty. Be intentional about how you collaborate with the government to drive regulation, quality, transparency, and accountability”.
Also, a keynote speaker at the conference, Dr Niyi Adesanya, lamented the rising housing deficit across the country.
He said, “Every Nigerian deserves a safe, secure, and dignified place to call home. Don’t ever ask for help if you’re in the midst of the one per cent (rich). The quality of your conversation can change your life.
“The Eklisia realtors’ conference stands as a testament to the company’s dedication to advancing the real estate profession and ultimately paving the way for a thriving real sector and fulfilling the dream of accessible and dignified housing for all Nigerians”.
Adozilion Homes and Realty last year launched the Monte Carlo City in the Epe area of Lago State.
SMEs
ACCI Urges Govt To Confront, Eliminate Multiple Taxation
The new President of the Abuja Chamber of Commerce and Industry, Chief Emeka Obegolu, has urged both Federal and State Governments to deal with the problem of multiple taxation to create an enabling environment for businesses to thrive and create jobs.
“We must confront multiple taxation and eliminate it. We must put Nigerians to work”, Barrister Obegolu said at his inauguration ceremony as the 12th President of the ACCI in Abuja, recently.
“We must never forget that it is the private sector – not the government – that is the engine of economic opportunity. Businesses, particularly small businesses, flourish and can provide good jobs when the government acts as a productive partner”, he said.
Commending the Federal Government’s bold move to remove fuel subsidy and its initiatives such as the unification of the foreign exchange market and the student loan programme, he said though the measures may have initially tested Nigerians’ resilience, they will, with time, yield the desired results.
Obegolu urged the government to deepen the collaboration with the private sector, represented by the chamber of commerce, a partnership that, he said, has the potential to significantly benefit the business community, the society at large, and the national economy.
Obegolu said because of the nature of Nigeria’s strategic and national security challenges, there is a need for everyone to work together with the national security and defence architecture to ensure pragmatic and visible support for national security and defence and; promote public cooperation across the sectors.
He said the ACCI will in conjunction with the defence and national security leadership institute, organise an annual summit on security, defence, and business to review and proffer solutions to the challenges facing Nigeria as a nation.
“This will foster confidence and assurance that Nigeria is a safe destination for investment”, he stated.
He promised that under his watch, ACCI would proactively adapt to the evolving landscape. He also said his presidency will prioritise collaboration with the government and other non-state stakeholders, and capacity building within the ACCI team, enhancing management processes for improved efficiency and productivity.
“I have spent my working life in the private sector, 25 years in the private sector. I understand that when the government takes money out of the hands of people, it shrinks their disposable income. If they can’t buy things, the economy doesn’t grow. If the economy doesn’t grow, we won’t put Nigerians to work”, he stated.
In a goodwill message, Deputy Speaker of the House of Representatives, Benjamin Kalu, described ACCI as a beacon for innovation and economic growth and a staunch advocate for ease of doing business.
He urged the new ACCI President and his counterparts in other Chambers of Commerce to find programmes to bring the youths closer to the chambers.
“Bring the youths to the entrepreneurial programmes you have. Please prioritise initiatives that promote inclusion; expose them to opportunities that will make them have confidence in doing the right things”, the lawmaker urged.
He also told the leaders of the various chambers of commerce in the Southeast region to come up with ways of developing themselves and impacting society.
SMEs
FG Plans PPP For Port Scanner Installations
The Federal Government says it is considering the Public-Private Partnerships (PPP) option to oversee the installation and maintenance of scanning technology at the nation’s ports.
This was disclosed in a statement on Monday after the Minister of Marine and Blue Economy, Adegboyega Oyetola, and his Transportation counterpart, Said Alkali, met with the Comptroller-General of the Nigeria Customs Service, Adewale Adeniyi, in Abuja.
The trip agreed that physical inspection of cargoes at the ports must be phased out.
According to The Tide’s source’s report, the immediate past Comptroller-General of Customs, Col Hameed Ali (retd), at the unveiling of the three scanners at Apapa in 2022, said the Federal Government would be procuring more scanners before the end of 2023.
Agents have, however, called on the government to install more scanners in the country’s seaports and border stations to boost cargo clearance.
In a statement jointly signed by the spokesperson for the Minister of Marine and Blue Economy, Ismail Omipidan, and the Customs spokesman, Abdullahi Maiwada, the government officials agreed that the collaborative model aims to sustain efficiency and foster innovation in cargo inspection processes.
They added that the use of modern technologies like scanners was important in addressing the issue of port congestion in a bid to ensure efficiency and competitiveness even as the CGC was charged to enforce the use of scanners at the ports.
At the meeting, the Ministers endorsed immediate action to rectify and optimise all existing scanners at prominent ports such as Apapa, Tincan Island, Onne, and Port & Terminal Multipurpose Limited.
“Simultaneously, the existing mobile scanners will be strategically deployed to facilitate expeditious cargo inspections”, the statement said.
Also speaking, the Managing Director of Nigerian Railway Corporation, Fidet Okhiria, who attended virtually, pledged NRC’s continued commitment to freighting cargoes to inland container depots/dry ports, adding that it would be a strategic move to alleviate congestion at major ports.
Plans were also unveiled at the meeting for the efficient evacuation of containers from Port Harcourt to Aba, with future extensions envisaged for Onne Port.
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