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Business News

Elumelu gives 4 key solutions for government to keep SMEs alive

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Chairman of UBA Plc, Mr Tony Elumelu, has blamed multiple taxes and levies from government for the collapse of about 95 per cent of Small and Medium Enterprises (SMEs) within their first one year of operation in Nigeria.

He revealed this on Thursday at the Lagos Business School Alumni Association (LBSAA) “2017 Alumni Day” in Lagos with the theme, “The Effects of Multiple Government Regulations and Taxation on Business Growth in Nigeria”.

The UBA Plc Chairman said that multiple business regulation, multiple taxation and inconsistent government policies affect SMEs’ competitiveness. According to him, multiple levies by the government and its agencies affect small businesses’ ability to attract capital in their investment climate.

Elumelu said 5 percent of the small businesses that survive after one year were a big disincentive to the nation in terms of employment creation.

He urged government to create a more conducive environment that would encourage survival of SMEs in order to reduce unemployment rate.

“It seems we have a big problem with high taxation and multiple levies; it is expected we should have very high tax revenue,’’ he said. According to him, government should find out the reason for the discrepancy for desired growth and development.

“Governments don’t create jobs, it is the right enabling environment for SMEs that create jobs,’’ he said, adding that public and private sector partnership was necessary to tackle the challenges facing the country.

“Issue of multiple taxation is enormous and must be addressed to achieve the desired growth,’’ Elumelu stated.

What government must do

  • Government should streamline all taxation and levies across the three tiers of government to avoid collapse of SMEs.
  • Government must leverage technology to foster automation in tax collection to reduce tax leakages, stating further that government should ensure greater awareness to approved taxes and levies to avoid extortion as well as introduce tax incentives.
  • The provision of comprehensive review of tax laws in the country to improve revenue and check excesses at the nation’s ports to improve foreign exchange earnings.
  • Those who pay taxes should be recognised and encouraged for people to embrace and pay taxes without being forced. According to him, government should go beyond focus on operational approach of collecting taxes and find a way of encouraging people to pay taxes.

 

Christopher B. Pemu has a degree in Political Science from the University of Lagos. He joined Nairametrics in 2014 as News Editor and later as Managing Editor. He currently serves as the General Manager of Nairametrics.He takes pleasure in traveling, enjoys world politics and in sport, he loves watching football and tennis.

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Economy & Politics

Nigeria needs urgent economic diversification – AfDB

The AfDB said that the diversification of the Nigerian economy had become important for it to respond favourably to the emerging challenges of the 21st century.

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AfDB, Lutoyilex Construct Ltd, fraud

The African Development Bank has stated that Nigeria, Africa’s largest economy, needs urgent economic diversification to move the country from a single income source (oil and minerals) towards multiple income sources.

This was disclosed by Prof. Oyelaran-Oyeyinka Oyebanji, Senior Special Adviser on Industrialisation at African Development Bank (AfDB), at the 22nd Founder’s Day Lecture of the Igbinedion University, the first private university in Edo state, on Monday.

What the AfDB said about diversification

“In pursuit of long-term recovery and sustainable development, Nigeria needs urgent economic diversification. Nothing is more poignantly demonstrative of the danger of over-reliance on a single or narrow range of commodities than the recent crash in oil price we saw in 2020 due to the COVID-19.

Economic diversification entails a shift away from a single income source (oil and minerals) toward multiple income sources from an increasing spectrum of sectors, products and markets,” he said.

In case you missed it

The International Monetary Fund (IMF) stated earlier this year that economic diversification was important to Nigeria and critical for her economic recovery.

They said the limited gains from inward-oriented policies in terms of creating jobs and improving living standards suggested that Nigeria needed to have a change of strategy. It was pointed out that in order to accommodate a growing number of young people entering the labour market, Nigeria would need to create at least 5 million new jobs each year over the next decade.

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Business News

Ghana-Nigerian traders dispute: FG to send delegation to Ghana

The delegation will be led by the Minister of Trade, Niyi Adebayo, and comprised of other private stakeholders.

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AfCFTA: Trade Minister advises Nigerian businesses to take opportunity of agreement

The Nigerian Government will send a delegation led by the Minister of Trade, Niyi Adebayo, to Ghana to end the crisis between Nigerian traders in Ghana and local authorities—an issue that started last year before the Ghanaian Presidential elections.

The delegation was ordered by the Presidency as disclosed in a statement by the trade ministry on Monday evening.

The statement revealed that the delegation would be comprised of private stakeholders also who would be sent to dialogue with Ghanaian trade authorities to find a solution to the crisis.

The meeting between both parties will be held between May 31 and June 1, 2021.

What you should know

Recall Nairametrics reported last year that Ghana’s Foreign Minister, Shirley Ayorkor Botchwey, said that Nigeria’s border closure in 2019 hurt Ghanaians and nearly bankrupted many Ghanaian export businesses after their goods were stuck at the Seme Border for months, reacting to the shutdown of Nigerian-owned shops by Ghanaian authorities last year.

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