Multiple taxation, poor logistics impacting Nigerian businesses


By Alex C

Investors have decried the increasingly difficult business environment in the country, following the persistence of multiple taxation, transportation and ports logistics challenges, budget delays, high energy cost and worsening institutional issues that negatively impact on their margins.

Under the umbrella of the Lagos Chamber of Commerce and Industry (LCCI), the investors, including manufacturers, traders and players in the micro, small and medium enterprises,  unanimously said that access roads to the Apapa and Tin Can port complexes have become an unprecedented nightmare in the last three months, while smuggling, counterfeiting, under invoicing, granting of undeserved waivers, many tax-collecting agencies and imposition of unwarranted taxes have assumed worrying proportions.

Remi Bello, president, LCCI, who spoke on behalf of the investors, said delivery of containers and evacuation of cargo have become a terrifying experience, resulting in systemic traffic gridlock, paralysis of businesses, high demurrages, frequent accidents and risk to bridges and flyovers.

According to Bello, the Nigerian economy is still riddled with unfair competitions, arising from unbridled importation of consumer products, granting of undeserved waivers to individual firms and evasion of import duty payment.

He said the idea of giving revenue targets to government agencies such as the Nigeria Customs Service (NCS) often leads to unfair taxation and burdens on investors.

“Reports reaching us indicate many instances of upward review of values of import in complete disregard to the values of invoices of such imports,” said Bello, during the third quarter press conference held in Lagos.

He stressed that the power sector privatisation is yet to yield positive results, as businessmen, especially MSMEs, make huge expenditure on diesel and fuel as well as pay outrageous electricity bills for poor service.

Though there has been marginal progress in World Bank’s Ease of Doing Business rating, investors say registration of businesses at the Corporate Affairs Commission (CAC) now takes over one week, rather than the 24 hours earlier promised, say stakeholders. But others attribute it to power sector challenges, which muscle the top-line and bottom-lines of investors.

Jakob Bejer, managing director, Heidelberg Nigeria and honorary Danish counsel in Nigeria, said investors were already bearing huge costs of poor power supply to their firms, wondering how the country could be competitive in an atmosphere where most businesses were run on generators.

“We need to see actions. We talk of substandard imports and inability to compete, but how can we be competitive on diesel generators? Businesses cannot thrive in this kind of environment,’’ he said, during the business breakfast meeting organised by the Nigeria-Danish Chamber of Commerce  in Lagos recently.

The investors also said that lending rate has remained on the high side, thereby making it difficult for players in the SMEs to have finance access for business growth. For instance, the average lending rate for manufacturers in 2013 was 20.4 percent, according to the Manufacturers Association of Nigeria (MAN).

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