Stakeholders in the real sector have urged the government to go beyond mere promises and save the sector from total collapse, warning that about 95 per cent of the operators in the real sector are at the brink of shutdown.
Speaking with The Guardian, the Director-General of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Sola Obadimu, said 95 per cent of businesses in Nigeria are on the verge of failing.
He added that the pressure on the real sector has reached its peak and that the government cannot continue to make empty promises.
He said the economic environment as a whole is challenging, which has, in turn, led to a difficult business environment.
“None of the public institutions are functional and infrastructure is non-existent for both businesses and individuals. Consumers’ purchasing power is very weak because in value terms, Nigerian workers are earning far lower than they were earning in Q1 of last year,” he said.
He lamented that this is also the reason why inventories are piling up, forcing industries to close shop as “they cannot sell what they produce up to a particular threshold, a reason they are operating at a loss”.
“They have to reach a gross margin, which many businesses today are failing to reach because of rising poverty levels,” he said.
He added that they expect the government to look at the reasons why companies are folding up, instead, they are offering stipends.
“It is businesses that pay taxes and employ and we need to create a stable environment for them. Businesses cannot make plans because they don’t know what rate to use. They can’t even plan energy costs because prices are unstable. Businesses are groaning under the new electricity tariff and they are still running parallel energy sources alongside.
“I expect the government to look at the issues and tailor solutions accordingly. Rather, they give us speeches and stipends. If businesses keep failing and more people lose their jobs, crime will increase. DDI and tax revenue will reduce as well because a bankrupt business cannot pay tax or levies,” he said.
The Director-General of the Lagos Chamber of Commerce and Industry (LCCI), Dr Chinyere Almona, urged the government to go beyond the rhetoric of speeches and provide a stable environment which is very crucial for business success and attracting foreign investments.
On his part, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, said the government must get the fundamentals right with the reforms, which came with adverse consequences for players in the real sector.
“Some efforts are being made but more still needs to be done. The problems are numerous and we must not get tired of calling government’s attention to them. The reforms carried out are painful but needed to be done but the government should have responded quickly to the consequences of the reforms by rolling out policies that will mitigate the pains arising from said reforms. None of the announced reforms for businesses since last year have been implemented till date,” he said.
He urged the government to show more fiscal policy measures and accelerate interventions to reduce the impact of the harsh reforms.
“FX, high input cost, high energy costs and insecurity are the major problems businesses are facing today and until these are addressed, more businesses will continue to fail,” he said.
Almona told the government to ensure clear and consistent communication about economic reforms and policies to businesses and the public to reduce uncertainty, build confidence, and establish transparent mechanisms for tracking and reporting progress made through reforms.
