How not to kill the ‘hustle’ of Nigerians
Do you know how many bakeries I have shut down today? That was the sadistic boast of an official of the National Agency for Food and Drug Administration and Control (NAFDAC) on an “inspection” visit to a bakery in the Federal Capital Territory (FCT) some years ago. To her, it is a lifetime achievement to shut down people’s businesses, rupture an economic vein and render people jobless. To be clear, I am not saying standards should not be enforced. Rules are rules and should be obeyed. The regulations are designed for order, health and safety. They are not for window dressing. A bakery should operate to the highest standards. No one can sustain an argument to the contrary.
However, more often than not, government agencies are only after one thing: revenue. It is not strictly about enforcing regulations. And government officials are mostly after one thing: extortion. Rather than work day and night to aid the development and growth of businesses for the greater benefit of the Nigerian economy and millions of Nigerians, government officials are better at using their positions to extort, intimidate and oppress entrepreneurs. Only God knows how many businesses have gone bankrupt because of the tyranny. Tragically, we do not appear to understand that there is a direct link between government policy actions and the sad state of the nation.
On Monday, Vice-President Yemi Osinbajo, the chairman of the Presidential Enabling Business Environment Council (PEBEC), touched on a subject dear to my heart: creating the environment for Nigerian businesses to flourish. At the yearly review of how federal government agencies relate with the micro, small and medium enterprises (MSMEs), Osinbajo reminded them of their duty: to support the “hustle” of entrepreneurs. “People need the right environment and that is what our role is: to ensure that we understand that it is to facilitate and make it easier, not to become a stumbling block or a tollgate,” he told officials of NAFDAC, SON, FIRS and other principalities in the room.
I was putting this article together when the Premium Breadmakers Association of Nigeria (PBAN) protested at the Lagos State House of Assembly over multiple taxation and over-regulation. They said the following state MDAs regularly swoop on them in the name of regulation: the Lagos State Safety Commission, the Ministry of Transport, the Lagos Environmental Protection Agency (LASEPA), the Lagos State Traffic Management Authority (LASTMA), the Lagos State Fire Service, the Lagos State Inland Revenue Service (LIRS), the Lagos State Emergency Management Agency (LASEMA), Ministry of the Environment, and the Lagos State Signage and Advertising Agency (LASAA).
They further listed all the 57 LGAs/LCDAs as charging them separately for “mid-year papers” and “yearly papers”, in addition to collecting daily toll all over the state. Then, there are the well-established federal headaches: NAFDAC, Standards Organisation of Nigeria (SON), Ministry of Labour and Productivity, the Nigeria Social Insurance Trust Fund (NSTIF), and so on. Bakeries in the federal capital also have to contend with the Abuja Municipal Council Area (AMAC) and Federal Housing Authority (FHA) who both charge for “fumigation” in addition to all kinds of fees, including a special levy for the use of vans for bread distribution. That is the country that says it wants to create jobs.
If you are unfortunate to go into water production in Lagos state, there are many gods to appease, apart from NAFDAC and SON. They are: Lagos State Water Regulatory Commission (LSWRC), LASEPA, Ministry of the Environment, Lagos State Ministry of Health, Lagos State Fire Service, Federal Fire Service, Local Government Environment Service, Local Government Health Department, Local Government Fumigation Department, Local Government Food Department and the health office nearest to the factory. SON inspects four times a year. The ministries of health and environment do theirs twice. Mind you: for every inspection, there are official and unofficial costs.
I repeat: I am not suggesting that businesses should not be regulated, inspected or asked to pay taxes. These are the functions of the state. But, for the life of me, how many levies should an MSME pay in an economy that badly needs millions of more MSMEs? How many regulators should an MSME face? How can businesses thrive under this suffocating hand of government? Does the government — federal, state or local — ever assess the heavy-handedness and how it impacts on the economy? When will someone up there realise that it is in the best interest of government to seek first the prosperity of businesses — and bigger tax revenue will inevitably be added to it?
Osinbajo put it pointedly: “This is a country where people want and desire to work… the constraints are what we have to address.” Unfortunately, he was talking to a wall. MDAs are in a different world. That is why the NAFDAC official would be boasting about having shut down so many bakeries in one day. To her, that is the purpose of power. In his newly published book, ‘The Arc of the Possible’, Waziri Adio, former executive secretary of the Nigeria Extractive Industries Transparency Initiative (NEITI), posits that as a people, “our conception of power remains that of instrument of oppression, not as a means of protecting the rights and dignity of the ordinary person”. Word!
The way we have turned regulatory agencies into revenue-generating bodies has created a perverse incentive for extortion and oppression — as we can also say about the general drive for IGR. This is further worsened by the concentration of power in regulatory agencies, enforced sometimes with the muscles of law enforcement agencies and even blood-thirsty thugs. There is a lack of checks and balances. When an agency abuses its powers — to devastating effect on businesses and the economy — there is hardly anywhere for MSMEs to seek redress. In advanced countries, regulators focus more on helping MSMEs to comply and grow. They have no interest in shutting them down.
A major failing of policy design in Nigeria is the lack of basic checks and balances on regulators. Anywhere you give people power over others, especially in a place where people are besotted with using power to intimidate and oppress, you have to think about the tendency for abuse and how to check that. It is common sense. Another major policy design error is that there are no one-stop centres where MSMEs can access all regulators with ease, avoid multiple taxes/levies, and even have compliance officers to guide them. A true appraisal of governance in Nigeria will reach a sad conclusion that the leadership — at all levels — is neither sincere nor strategic in its policy thinking.
Recently, when Mrs Zainab Ahmed, minister of finance, promised that 40 million poorest Nigerians would be paid N5,000 monthly when petrol subsidy is removed, I told myself: the government still doesn’t get it. An average Nigerian can generate N5,000 daily if only the government would not make life unbearable for him or her. Sure, they will collect the N5,000. Who rejects free money? But that is tokenistic and unsustainable. The Nigerians I know — north or south — are entrepreneurial. Don’t give them fish. Just allow them to use their hooks and nets under the right atmosphere. Stop sending thugs to hamper their hustle. Stop taxing them to hell. They will catch fish by themselves.
Here is my point. Any government that is going to pull millions of Nigerians out of unemployment, poverty and disease, tackle insecurity and propagate peace and prosperity will first have to understand that it has to create a conducive environment for business. Nigerians need their government to support them with infrastructure and incentives. When we say government should create jobs, we are not saying it should set up more parastatals. How many millions can government employ? We are saying government should create an environment for businesses to germinate. Most of these jobs will be in MSMEs. That is the engine room of every economy in the world.
There is a stark lack of understanding in government on how the wheel of economic progress is oiled. The government-erected obstacles are just too many. Generally, it is as if government deliberately wants to kill the entrepreneurial spirit of Nigerians. I am not talking about MSMEs alone. Some of the biggest demons tormenting businesses in Nigeria today are in the Nigeria Customs Service (NCS). The extortion and blackmail are incredible. Any government that genuinely wants the Nigerian economy to prosper will focus on reforming Customs. We shouldn’t even be debating this. With the way they behave, you would think the mandate of Customs is to destroy enterprise.
You would expect an import-dependent country like Nigeria to at least instil efficiency at the ports to save its own life. But you are expecting too much of the government. We depend heavily on imports to meet strategic and critical needs. We import all sorts — milk, wheat, poultry, fish, medicines, name it. We import virtually every piece of paper and every yard of textile. According to the National Bureau of Statistics (NBS), our trade deficit was N5.81trn in the first half (H1) of 2021. Our export was valued at N7.99trn while import was N13.8trn. In fact, H1 2021 imports were 22% higher than H1 2020 and 60.7% more than H1 2019. When we had trade surplus, it was all thanks to crude oil!
To reduce Nigeria’s chronic import dependency, is it not common sense for us to improve local productivity and incentivise export? But what do you say when we charge $1 million just to process a licence for a special economic zone (SEZ)? The whole of $1 million for a piece of paper! Years ago, I read of a state government that had to bribe federal government officials with millions of dollars to get the necessary documents for an SEZ. You go from one government agency to the other and discover that the actions and attitudes of the officials are completely at variance with our openly stated goals of promoting economic development. Why are we like this? What is wrong with us?
As we prepare for 2023, you would expect issues such as ease of doing business, reform of Customs and other agencies, efficiency at the ports, and other germane matters of economic development to form the basis of campaigns and debates. At least, let us set the tone for a robust electioneering. But many Nigerians, particularly on social media, are only obsessed with “tribe and tongue” as if that is what is going to bring down the price of garri. It is said that in a democracy, people get the leaders they deserve. I think we need to break this vicious cycle. All the signs around us point to the fact that if we don’t start doing things differently — and urgently — Nigeria will be doomed. Eternally.
AND FOUR OTHER THINGS…
Chief Bisi Akande, former governor of Osun state and former deputy governor of the old Oyo state, recently released his memoir, ‘My Participations’, to wide condemnation. Most of the responses so far accuse him of being timid with the truth and fiddling with the facts. Chief Ayo Adebanjo, the Afenifere leader, and Chief Olagunsoye Oyinlola, Akande’s successor in Osun state, have both strenuously pooh-poohed Akande’s claims in the book. Akande mysteriously left out the fact that he was jailed for corruption by the Buhari military government. I used to respect and idolise Akande a lot, but I think this book has altered my view of him. Silence can be golden at times. Duplicity.
Abdulrahman Odunare Olamilekan, a young Nigerian, reportedly jumped into the lagoon at Epe, Lagos state, on Tuesday. His body was found two days later. His widow, Rufiat, told the media that he had been talking about committing suicide for days but, as it is typical of us, people around him scoffed and said he was on drugs. I suspect that he had lapsed into depression. Unfortunately, we still do not take mental health seriously in this society. I doubt if there is any helpline for people to report cases such as Olamilekan’s. Even if he was on drugs, what he needed was help, not ridicule. Let’s hope Olamilekan’s case would rekindle public interest in mental health. Imperative.
The Nigeria Labour Congress (NLC) has announced that rallies will be held nationwide to protest against the plan to remove petrol subsidy. The rallies will take place in the 36 states on January 27, followed by a national protest in Abuja on February 1. This has always been the case anytime government increases the price of petrol, although, to be fair, there were no protests in 2016. Unions always oppose fuel price increases because of the immediate impact on transportation costs and the effects on food prices. However, there are bigger issues around the current petrol pricing regime and the oil sector which the unions must rigorously interrogate beyond holding rallies. Deep.
BUHARI AT 79
On Friday, President Buhari clocked 79. When he leaves office in 2023, he will be 80. He is easily the oldest man to have ruled Nigeria. He was 72 when he was elected in 2015. No Nigerian leader has hit 79 in office. The closest record is held by President Olusegun Obasanjo, who was 62 when he was elected in 1999 and left at 70. Dr Nnamdi Azikiwe was 75 when he ran, unsuccessfully, in 1979. The youngest-ever leader remains Gen Yakubu Gowon, who was 31 when he became military head of state in 1966. He was overthrown in 1975 when he was 40. That record is unlikely to be broken: you have to be 35 and above to run for president. Lest I forget, happy birthday to the president. Cheers!