How access to loans, tax holidays can ease business operations
The business environment was brightened by a record in October 2017 that Nigeria moved up to 24 places to become one of the 10 most improved economies globally.
Rankings in the ease of doing business by the World Bank which began in 2002 is a parameter for measuring performance of economies in policies and programmes that allow businesses to thrive in a conducive atmosphere.
In spite of Nigeria’s feat, experts, however, believe that there should be more action for business to be done with ease to boost the Gross Domestic Product (GDP) because Nigeria still ranks 145 out of the 190 countries assessed.
Daily Trust analyses experts’ views on how easier business operations can be improved to realise objectives of the Economic Growth and Recovery Plan (ERGP). Such initiatives could also enable the Presidential Enabling Business Environment Council (PEBEC) set up in July 2016 to further improve the economy.
A development expert and the President of Young Entrepreneurs of Nigeria (YEN), Chris Kohol, said flexibility in accessing loans by farmers and SMEs would go a long way in addressing the difficulties which business people encountered when they were about going into business
He said, “Access to loans by farmers and other Small and Medium Scale Enterprises (SMEs) through the Anchor Borrowers Programme (ABP) needs to be effective in terms of the procedures for accessing loans and the interest charged on repayment.
“Overtime, farmers most especially have complained about accessing loans and sometimes implementation or distribution of materials to aid farming, such as fertilizer. For Nigeria being an economy that has over depended on oil, and wants to diversify to other sectors such as agriculture, flexibility in assessing loans is important.
Kohol also called on the Central Bank of Nigeria (CBN), the Bank of Industry (BOI) and other development banks to maintain a considerable amount charged on repaid loans to encourage SMEs.
“Accordingly, interest that is charged on such loans must be done in a considerable manner to encourage farmers and other young entrepreneurs who want to contribute their quota to national development as the tide of unemployment keeps rising” he said.
He added that the process of registering business with the Corporate Affairs Commission should be further enhanced through efficient verification and speedy approval.
An economist, Mr Umar Babangida advocated for revised charges on taxations for start-up businesses if the country wants to grow its economy through ease of doing business.
“Tax, a revenue generation means, has been heavily laid on start-ups in small businesses and that has affected them negatively. On the contrary, those that are supposed to be taxed more by the Federal Inland Revenue Service (FIRS) evade tax,” Babangida said.
He further noted that the ratio of tax to GDP was very low in Nigeria at just six per cent, advising that the focus of government should be on increasing tax revenue from the tax base by bringing in more people into the tax system, especially big companies and public agencies.
To him, the FIRS Voluntary Asset and Income Declaration Scheme (VAIDS) which elapses in two months, should be aimed at getting more people into the tax net and at the same time encourage SMEs through subsidised tax levy. “This way it will serve as a morale booster for youths to engage in fruitful ventures that can boost the economy,” he added.
Another financial expert, David Danjuma, believes that finding a lasting solution to famers/herders clashes will make doing business easier and create better atmosphere to attract foreign investors for SMEs.
“The clash between farmers and herders is becoming a perennial problem that must be nipped in the bud before it gets out of hand. Consequently, this sad development has made it very difficult for some businesses to thrive in areas prone to such clashes.
“In the recent past, North Central states of Benue, Plateau and Nasarawa have been engulfed in such crisis, extending to Taraba, Kaduna and other states with the recent one being in Benue State following the anti-grazing law in the state. In a large margin, such crises affect business activities and make business manufacturing prospects difficult,” he explained.
Operators seek environment better business
Our reporter spoke to a cross section of entrepreneurs engaged in small and medium scale business on their expectations in 2018. Most of them advocated for conducive atmosphere for their businesses to thrive and also to contribute meaningfully to the GDP of the country.
Among them is Ahmadu Ali who runs a solar panel installation outfit. He said a conducive environment that would allow SMEs’ owners to operate was the best solution to the teeming unemployment rate in the country. He said empowering youths who were into different businesses was ideal for the economy that was resurging rather than annual employment.
“There is no year that the Federal Government will not say they want to employ people into its workforce. This must not necessarily be done on an annual basis because you keep on recruiting and the index for unemployment keeps rising. So empower youths who are skilled in different businesses and want to run them privately to boost the economy,” he said.
Another entrepreneur, Amos Gandu, said youth empowerment through different skills acquisition was a preferable option in contributing to GDP.
“Our recurrent expenditure is shooting up in every budget because of the many workers we have in the ministries. Making business easy and the process of registration simple for youths will go a long way in getting them productive rather than employment all the time,” he advised.
He said registration of businesses should be made affordable and accessible to people with low capital who wanted to invest.