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Looking back at 2024 and how businesses have fared, for the Director General, Nigeria Employer’s Consultative Association (NECA), Mr Adewale Smatt Oyerinde, it is a mixed bag, but the most important thing is the fact that regulatory agencies with their overlapping functions have made business operations in the country unbearable.
In this interview with Daily Sun Workforce, Oyerinde explains the position of the Organised Private Sector(OPS) in the tax reform.
He also looks at the humongous national debts and why Nigeria should stop borrowing.
Among others, NECA boss examines controversy trailing the Taiwo Oyedele’s Report, what must be done to make the National currency strong, the oil and gas sector and NE- CA’s contribution to national skills development.
Excerpts:
2024 In Retrospect
It has been a rollercoaster for the Organised Businesses from January till now. There are lots of expectations. The reforms came up and we expected that the impact of the reforms will be felt as soon as possible. While there has been some level of stability, the effect that we anticipated, we have not really seen it. Maybe government did not anticipate the dept of the challenges that is on ground. Expectations were high.
Over- lapping functions of the regulatory agencies remain the major challenges through- out the year for us . While we commend the Presidential Enabling Business Environment Council (PEBEC) for given us succor. Notwith- standing, we discovered that there may be issues which should be looked into and that is the overlapping functions of the regulatory agencies. For instance, Federal competition and Consumer Protection Council (FCCPC)
is becoming an anti- business growth. Also, NAFDAC, Standard Organisation of Nigeria (SON) were also noticed for their overlapping functions.. It’s a big challenge to us in the business community. Even
at the legislative, differ- ent committee were sets up and they are always pursuing organize businesses. All these are serious challenges for us in 2024. However, we want to commend the Federal Government for its transparency and support it has given to the business community.
Tax Reforms
The issue of tax reform has been controversial and the reason is because many people did not go through it thoroughly. For us, it’s a good thing. We were happy when the committee was set up . But along the line the work of the committee has been politicised. Rather than people focusing on bigger picture of what it entails and the benefits, differ- ent interests group are spring- ing up with their own interest. Kudos to the Chairman of the committee and kudos to the President for insisting that the bill must go to the National Assembly. Any- body that has issues with the bill should go to the National Assembly, but for us it’s a way to go. During the engagements, every group were represented and all submitted their reports. But it is very unfortunate that some group are kicking against it at this time. We should not allow any interest beyond that of the national interest to dictate to the direction where we should go. We have been running this country in that patterns for many years, we need to change this. For now, the best option is for President Tinubu to push it to the National Assembly. Let all of us go to the National Assembly, make our position known and let the National Assembly holistically look into it. There is no perfect law or perfect reforms. There will al- ways be room for amendment, refining, modify- ing in order to serve the bigger interest.
Workers pay more tax
One of the challenges we have before is the problem or de ciency in tax collection and the tax creating an environ- ment where there is voluntary payment. In the current tax system, many people are not captured. Many people who are supposed to be taxed are hiding and not paying . Work- ers are paying through their nose, which is PAYE. Busi- nesses don’t have option but to pay through company income tax, capital gain, withholding
, among others. But all these have been addressed in the new tax reform. The new tax reforms also gives relieve to those who should be given relieves to. And that is how it
is done globally. The brohaha about it is quite unfortunate. Many people have added their own context into it. Something that suit them , but we are taking about the nationhood. The need to build the Nation. For us, it’s a good thing, even though lots of engagements
are still ongoing. The problem is that majority of Nigerians have not really sit down and go through it thoroughly. They just based their judgement on what they hear from one arm chair TV analyst or a core in uencer who also speaks from their own area of interest which they are also pursuing.. And they start reacting. Government still has a lot of engagement, enlightenment to do.
Smatt-Oyerinde Oil & Gas
There are lots of contradic- tions going on in oil and gas sector or the issue of re neries..
We all know that the four reneries has not been working and we are spending humongous forex on importation.
And because we are spending so much on fuel importation, the real sector that should have access to forex is been neglect- ed. So, the expectation of an average Nigerian is that with the Dangote refinery running, critical cost element in importing will drop. In order word, we should be buying at a cheaper rate than when we are importing. Now, Dangote refinery is working and we now have another issue which is the regulatory playing the role of a spoiler. Dangote Refinery came on board and we heard that NNPC is not supplying crude to them and Dangote has to import crude so as to produce fuel. Denitely it will have impact on the cost of production. Those are the contradictions. Even with the swapping of the Naira, which is naira for crude, the relief cannot be felt immediately.
We even heard that there are some people with private refineries outside the country. These are the set of people fighting Nigerians so that Nigerians don’t live a good life . There is this saying that as far as oil and gas sector is concerned, the more you look, the less you see. We need high serious transparency in the sector because it takes a big risk for one to invest in such and they should be supported.
Foreign investors are watch- ing us. We also need to put on board all other refineries running. Let the market forces play its role. We witnessed this in the telecom industry, it can happen in the oil and gas sector too.
National Debt/ National Asset
When you look at the humongous amount of debt, value of the debt and the interest rate, it is worrisome. We should cut our coat according to the cloth. Borrowing signi cantly to fund many things is worri- some. We hardly see the effect or outcome of the borrowing by the past governments and everyone feel skeptical. Let us maxi- mize what we have. For instance, there are lots of recov- ery by the EFCC, where are those money going into. These are the areas we should look into instead of borrowing every time. There is also another school of thought that many of our national assets have been abandoned and nothing is been done. Why can’t we privatise them and maximize those assets. An expert said we have trillion of dollars in assets. We can make enough money from them.
Taiwo Oyedele Re- port.
The report is all encompassing. The report dealt with tax administration system. Inside of it, it remove the collection of tax from agencies that are not supposed to collect tax like customs which is not an income generating agency. Their job is assessment. Those are the issues.
Also, it addresses merging of agencies. We have many agencies that are doing the same thing. Every- body is now doing revenue collection. They should face their core responsibility. The controversy that the Taiwo Oyedele Report is generating is not as a distrust of the committee, but it’s as a result of the distrust on the government by the citizens. Government need to be more transparent.
Employment Generation
We can not continue to feed the course and still continue to complain about the effect. Some- body said that he has diabetes, and he’s still eating sugar. You’re feeding the course of what you are complaining about. There is no two ways to it. Ad- dress it from the context of enabling businesses to be sustainable, expand so that they can create more jobs, or address the core issue of entrepreneur- ship. Entrepreneurship and technical vocational training are critical arears which should be addressed. And as
for NECA, we will continue to pro- mote employment and develop skills. Recently, we inaugurated an ICT academy where about 50 youths were graduated in the month of November. We are also opening such in Abuja. We also have our partnership with Indus- trial Training Fund (ITF), where skill development is the core. We have been doing this for the past 13 years. We have empower young Nigerians that are versatile, able and competent. We need to continuously support private businesses be- cause for every 10 jobs, private sectors create eight.
Outlook for 2025
The expectations is that for things that have worked, government should deepen engagement on those things. Few days ago, Naira gain massively. Once government identify what is behind this positive impact, they should deepen its process and let it continue. If we don’t produce and export, Naira will continue to depend on dollar. Let our propensity to import reduce. If more Naira are pursuing less dollars, the value of Naira will go down.
It is not a rocket science. We must export and produce locally. The issue of insecurity should be addressed. Farmers must be protected so as to be able to produce food. Government need to be more transparent and build consensus .
As I said , regulators must be called to order. They should be made to account for how many businesses
they have facilitated or help to grow. Not how much they have generated through penalties. Any reform that is not working should be changed. It is better to be in- consistence sometimes, rather than persistence in errors.
