By Modupe Gbadeyanka
The Lagos State Internal Revenue Service (LIRS) has been commended for introducing a Whistle-Blower Initiative aimed to boost the trust of taxpayers in its activities.
According to a civil society organisation, Vanguard for Transparency and Accountability, this policy will promote openness, and accountability and ultimately enhance citizens’ participation in governance and then put the agency under public scrutiny.
In a statement, the president of the anti-corruption crusade group, Mr Paulycap Nnabuogor, said the LIRS led by Mr Ayodele Subair has done well to sustain its pace-setting records in tax management reforms in Nigeria.
He expressed optimism that the initiative will strengthen and re-invigorate frontiers in the fight against fraud and corruption and put both the management and the staff of the agency on their toes to deliver their statutory roles in compliance with the global best practices.
“We are not particularly surprised that the Lagos State government chose the LIRS as a pilot scheme for its Speak Up programme because of the reforms the Subair-led management of the revenue agency had carried out internally to boost its operations and enhance the capacity of its workforce.
“Undoubtedly, this initiative shows that the activities of civil society organisations like ours are beginning to bear fruit and Nigeria is the ultimate winner.
“Before the birth of the Whistle-Blower Initiative, we were aware of the efforts of the LIRS management to promote accountability within the system and the importance Subair particularly attached to the welfare of his staff.
“Our findings show that the LIRS maintained the payment of performance allowances to the staff, and doesn’t joke with the prompt release of other pay including wardrobe allowances, particularly to the staff at both the legal and relationships units all geared towards enhancement of performance.
“More so, we found out that the decision to introduce a computer-based test for promotion, which is handled by independent assessors, has encouraged high-fliers within the system to grow rapidly and underlined why the agency has maintained its status as the best-performing tax collecting board in the country. Subair’s Award of Recognition by the Joint Tax Board of Nigeria is a testimony of his achievements as the agency has always met its revenue target even during the COVID-19 pandemic,” he said.
Meanwhile, Mr Subair restated the commitment of the LIRS management to the welfare of its staff, strengthened by the belief that a motivated workforce will lead to greater productivity.
“We take our workforce’s welfare and career development as a key metric in our journey to consistently deliver our statutory role as a revenue agency.
“In 2019, we approved a 70% salary increase for staff from Assistant Revenue Manager and below, and a 50% increase for Revenue Manager and above. This is the most significant salary review in the Agency to date. A total of 3,608 members of staff were promoted between 2017 to 2021 and all our staff do not pay for standard medical services.
“We also ensure that performance bonuses are paid to all staff, based on clearly defined and documented processes while Union dues are remitted timely and correctly with all other statutory deductions such as pensions,” the tax man said.
He added that the consequential adjustment of salaries has been agreed upon in principle and payment modalities are currently being worked out by management, stressing that all are geared toward ensuring that the agency serves the people of Lagos State effectively.
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Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN’s Richard Quest and Christiane Amanpour.
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By Adedapo Adesanya
The Nigerian Ports Authority (NPA) has approved the establishment of 10 new export terminals across the country with a view to processing export cargoes and boosting the nation’s foreign exchange (forex) earnings.
This was disclosed by the NPA Managing Director, Mr Mohammed Bello-Koko, in Lagos, who noted that about three of the approved terminals have commenced operations.
Mr Bello-Koko also said that five of these export terminals are in Lagos, one in Ogun State and others in the other parts of the country.
“Before the CBN made that appeal, we have already proactively taken steps to ensure that is done. We gave licenses to 10 export processing terminals. And the essence of those terminals is first of all for exporters, especially for the export of agro produce, minerals to be able to take their exports to those locations.
“They should be sorted there, they should be processed there, they should be tested, they should be certified, packaged and then containerized if that is what they want to do. And the container should be sealed, and then from that location, the container should be taken directly into the port and then into the vessel.
“What we are doing here is to reduce the cost to the exporters, reduce the time that it takes to export these goods out, and then make the process faster and seamless actually.
“And out of the ten I think three or four are operating, there are awaiting, you know there ought to be a Nigeria Customs export desk at such locations. And every other federal government agency that is necessary to enable export should be at those terminals. And we have written to all the relevant government agencies to have a presence at those locations.
“So, we have already taken that initiative before the CBN Governor came up with that initiative. And we also link up our export processing terminals to the DEW that is been created by the Nigeria Export Promotion Council (NEPC).
“Those ones are in the hinterland. There is also the Domestic Export Warehouse, DEW, we linked them with eight or so of the export processing terminals, so as to make it easier for the goods to come into the port.
“So, we have taken the initiatives, and yes we have listened to the CBN Governor. What he was asking for is a dedicated expert terminal, which means a terminal by the sea, with a berth and others to take away vessels. It is something that is in the map, in the drawing but what we have done is to create something like that outside the port, and then we move it into the port. And we have encouraged all terminal operators to also have warehouses and necessary facilities for non-oil export
“We gave licenses to ten exporting terminals and the essence is to first of all for exporters of agricultural products and natural mineral resources to be able to take their exports to those locations.
“These export products will be sorted, processed, tested, certified, containerized and sealed if need be and from there, the export product be taken directly into the port and onto the vessel,” he said.
The Nigerian currency has been suffering at the currency market because of low FX earnings from crude oil sales.
By Adedapo Adesanya
Nigerians paid more to purchase key food items as prices of groundnut oil, palm oil, rice, beans, beef, tomatoes and others skyrocketed in July 2022 at the market as the inflationary pressures continue to dig deeper into their pockets.
According to the National Bureau of Statistics (NBS) Selected Food Prices Watch Report for July 2022, the price of groundnut oil increased by 40.24 per cent on a year-on-year basis to N1,078.17 from N768.81 in July 2021, while the price of one bottle of palm oil surged by 40.29 per cent to N890.67 in the period review from N635.31 in the corresponding period of last year.
The report also showed that the average price of 1kg of local rice increased on a year-on-year basis by 13.55 per cent from N411.97 in July 2021 to N467.80 in July 2022, while the price of 1kg of white beans rose by 23.22 per cent from N444.21 in July 2021 to N547.38 in July 2022.
The report stated also that the average price of 1kg of tomatoes increased on a year-on-year basis by 7.71 per cent from N414.83 in July 2021 to N446.81 in July 2022 as the price of 1kg beef (boneless) in July 2022 was N2,118.84, an increase of 27.58 per cent from the N1,660.76 recorded in July 2021.
State-by-State analysis showed that Rivers recorded the highest price of 1kg of local rice at N619.62, while the lowest was recorded in Jigawa at N363.34.
Ebonyi recorded the highest average price of 1kg of white beans in July 2022 at N900.51, while the lowest price was recorded in Borno at N317.73.
The report stated that the highest average price of 1kg of tomato was recorded in Edo at N799.16, while the lowest was recorded in Taraba at N159.14.
Analysis by zones showed that the Southeast recorded the highest average price of brown beans at N853.19 per kilogramme, followed by the Southwest at N598.00, while the Northeast recorded the least at N379.03.
The Southeast recorded the highest average price of tomato at N678.80, per kilogramme, followed by the Northwest at N656.93, while the lowest was recorded in the Northeast at N194.72.
The NBS stated that the average price of 1kg of local rice in the Northwest was N796.03, representing the highest recorded in July 2022, followed by the Southwest at N519.64. The North Central recorded the lowest price for 1kg of local rice at N401.72, it stated.
By Timi Olubiyi, PhD
Despite the significance of small and medium enterprises (SMEs) to the economy and national development, Africa has a high rate of business failures and short-lived businesses.
In Nigeria SMEs account for 48 per cent of the national gross domestic product (GDP), 96 per cent of businesses, and 84 per cent of employment in the country, according to a PricewaterhouseCoopers (PwC) report.
In contrast, due to the country’s dire economic circumstances, at least 1.9 million SMEs have been lost since 2017, according to the report, yet business closures persist at an alarming rate.
Why do so many businesses fail so quickly, be they structured or unstructured? It can be attributed to many challenges, and this is the focus of this piece.
In the context of this article, the word “failure” refers to any kind of closure, including bankruptcy, liquidation, stopping further losses, giving up and starting a new business, and/or closing by choice (like retiring early or shutting down).
According to the author’s observations, small businesses, especially those with one to nine staff, are prevalent, mostly unstructured, and largely operating informally throughout the country.
Convenience shops and grocery stores, dry cleaning and laundromat services, taxi services, trucking and transportation businesses, beauty salons, local restaurants, and several other small businesses operate with no data sets or registration databases.
For instance, in Lagos State, most of these small businesses are overwhelmingly dominated by people moving in from other states of the country, largely due to the fact that barriers to entry into the business ecosystem are low, and there is no compulsion for registrations or certifications, and the start-up capital is usually low.
The worry is that many of these business operators are inexperienced and pay no attention to business structure, technology, skill sets, accountability, or the importance of business continuity. Therefore, business failures keep getting worse without any known help.
In fact, it is hard to see how the sector can make a big difference or impact in creating jobs, growing the economy, and reducing poverty. Business failure is the last stage of the business life cycle. However, it is so prevalent that it happens within the first five years of a significant number of SMEs in Nigeria and the rate is alarming.
Even though the environment is a key part of how easy it is to do business, it is still harsh and hard in the country, with or without post-COVID-19 consequences. Truly, there are many problems with the economy’s supply chain and infrastructures, such as the price of diesel, problems with the foreign exchange market, and regulations that hurt businesses.
Many of the business failure factors are frequently categorized as “poor management or lack of access,” though the failure predictors are in two broad categories: internal factors (controllable) and external factors (uncontrollable).
Without a systematic outline and identification of the many challenges faced by small businesses, here are the most common business failure factors in the country that operators need to pay attention to low quality or low level of education and qualification of operators and workforce; lack of manpower, loss of seasoned personnel and management due to social mobility and relocation (Japa), resulting in skill shortages within the business and inability to attract and retain new highly qualified personnel; lack of an appropriate corporate governance structure and organogram in the case of the few structured SMEs; Customer dissatisfaction due to a low product or service quality; poor customer experience and declining patronage.
A variety of funding issues are also relevant to business failures, including no or low business capital or profitability, revenue erosion (in some cases referred to as undercapitalization), insufficient cash flow or cash reserve, and excessive reliance on borrowed funds (high leverage).
Poor accounting practice, teeming, and lading can also result in business failures. The absence of adequate marketing channels, poor market knowledge, outdated services and products, and not being in touch with customer needs (for illustration, dealing in Nokia 3310-related accessories or phone sales when the market demand is for Android phones).
Poor and negative customer relations; poor pricing techniques; lack of innovative drive, ignoring product or service innovations and new ideas; ignoring competitors’ pressure and offerings; resource mismanagement; undue family influence and control in the business operations can kill businesses.
Further to this, poor internal communication, lack of free flow of business information, and fraudulent acts by employees, including legal tussles, can also be contributory to the failures.
Others are ineffective and reckless leadership tendencies, a high cost of running the business, huge overhead, and an inability to control expenses, inappropriate response to new external and/or internal challenges, lack of strategic and business planning (competitor analysis, marketing analysis, risk analysis, opportunity and threat analysis). under-estimating or over-estimating risks in the marketplace, among others.
There is also the failure to recognise and capitalise on new market opportunities, intense competition, and adherence to ineffective competitive formulas or strategies. Another is being outwitted by competitors or even former employees; and relying too heavily on one or a few clients’ patronages are also attributable.
Leadership tussles and conflicts within management, business owners, and/or power struggles cannot be ignored. Failure to provide value for money can make customers disgruntled and avoid patronage.
Poor inventory management, and failure to differentiate products and services in a highly competitive environment. and the strong bargaining power of buyers can cause business failure. In the era of globalization, e-commerce, and high adoption of technology, any old equipment, machinery, or technology issues can make a business fail. Low or no online visibility, inadequate technological adoption, or failure to take advantage of new technological advances can also adversely affect businesses.
Largely unforeseen mishaps can happen, failing to learn from this or one’s errors, and the repetition of such errors and poor decision-making can have huge consequences. Overlapping responsibilities in the case of one-man businesses where the owner claims to be an expert in all departments and business functions can make the business fail. Where there is no distinction between ownership and management and there is an excessive concentration of authority, including excessive administrative rule imposition on subordinates and employees, it can ruin a business.
From the government side, unanswered macroeconomic challenges, economic instability, multiple taxation, no ease of doing business, regulatory hurdles and multiple permits, and a harsh economic climate are just some of the negative factors. Poor infrastructure, bad roads, erratic power supply, limited access to government grants and support, and much more, particularly power and the cost of generating alternative power are also some factors.
Further to this, the rising costs of doing business, inflation, irregular policies, the judicial system where disputes linger for several years, and political influence and interest, including corruption, are all part of the factors attributable to business failure.
Even common macroeconomic factors like recessions, insecurity, government debt, exchange rates, and high-interest rates, are just a few. The power (electricity) situation in Nigeria has been a great cause for concern for businesses, investors, and citizens at large and is equally significant in the overall performance of the economy.
These infrastructure gaps and weak macroeconomic factors can be blamed on the depressed economy and prevalence of business failure in Nigeria. The turn-around time at the ports, and congestion on the roads, are all imperative causes of business failures in the country and cannot be controlled by entrepreneurs and SME operators.
Consequently, it poses a big risk to businesses unless the government intervenes decisively and gives the needed policy responses. This is the big prayer of all SMEs and entrepreneurs in the country.
Above all, the culture of not seeking expert opinion, advice, and consultation for problem-solving is the overall bane of SME operators or owner-managers.
One or more of the above-mentioned factors are warning indications of business failure. SMEs must pay close attention to these indicators as soon as they appear, in order to avoid a crisis. Maintaining an appropriate structure, adequate capital, and having contingency plans are some of the best strategies to control and reduce business failure that these factors can cause. Further prerequisites for small business success may just be the next article from the author. Good luck!
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Dr Timi Olubiyi is an Entrepreneurship & Business Management expert with a PhD in Business Administration from Babcock University Nigeria. He is also a prolific investment coach, author, seasoned scholar, Chartered Member of the Chartered Institute for Securities & Investment (CISI), and Securities & Exchange Commission (SEC) registered capital market operator. He can be reached on the Twitter handle @drtimiolubiyi and via email: [email protected], for any questions, reactions, and comments.
The opinions expressed in this article are that of the author- Dr Timi Olubiyi and do not necessarily reflect the views of others.
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