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Monday, 14 November 2016

#FranklySpeaking: The Little Foxes That Destroy The Vineyard...

A few weeks ago I was the guest speaker at an event in owerri where I tried to inspire young start-up companies on how to generate their ideas, formulate their business plans, raise capital and distribute their products.

With 2015 GDP at about 95 trillion and the same year government budget at about 4.3 trillion, it's crystal clear how much the private sector actually drives GDP.

But with over 200 million people, most of them in their youths, we can see that our GDP is still a far cry from what we can do.

So entrepreneurship and developing the private sector remains the key to growing GDP in this country.

We spend so much lobbying foreign investors without giving attention to millions of potential local investors. We forget that the foreign investors will only come in to face the frustration which the local operators are facing.

But the truth is that government have often failed to support the private sector, rather they have continually crippled the sector.

Cost of doing business in Nigeria remains very high, with company income tax at 30%, one of the highest in the region and a multitude of unnecessary state taxes, you can say that the Nigeria private sector is a miracle in itself.

A consultant I hired a few years back actually proved to me that one of the major states in the south south actually has a total of 53 different taxes.

The problem is that the applicable tax should be determined by the Joint Tax Board (JTB) being the body that by law harmonizes all the taxes of the three tiers of government to arrive at an effective tax rate.

But States and Local Governments simply disregard these recommendations in their bid to drive revenue thereby astronomically increasing a local business' effective tax rate and suffocating local investors .

In Nigeria, little things like common company registration requires you to hire a lawyer and spend so much while in countries like Rwanda, you can actually go online and register your company free of charge.

But the big elephant standing before this young start-ups is the issue of raising funds.

With our archaic and under-developed Land Use Act which puts all land in the hands of government, it becomes practically impossible to get collaterals to access loans.

Commendation must be given to Governor El Rufai of Kaduna state who solved this problem in his state by issuing electronic C of Os to everyone at a very minimal rate of 20,000 naira and you don't need to lobby anyone.

Other governors should go and look at the models used by El Rufai and Adams Oshiomole in making sure lands have titles. But, on the other hand, government should begin to make efforts to repeal the Land Use Act.

Over the past few years, Nigeria's budget recurrent expenditure has often hovered around 75% to 78% and even an alarming 91% in 2015.

What this means is that this percentage of every budget is often used to maintain civil servants and politicians in power. The irony is that this group makes up about 5% of the total population of Nigeria.

So when government plans to take a loan or sell national assets, just know that 80% of the funds is only for 5% of Nigerians, while the remaining 95% of Nigerians scramble for the remaining 20% with the 5% in government also contesting that remnant with them. 

Yet, these five percenters are the ones killing this country. We have a very greedy and selfish political class, yet the Nigerian civil service is actually the worst culprit in greed and inefficiency .

The level of development a country attains is a measure of how effective it's civil service is. They do so little and continually ask for minimum wage increase through Labour unions while also being responsible for 80% of corrupt practices in the country .

I can tell for sure that no politician in this country can steal a fine without the collaboration of civil servants.

Whenever I read an advert that a government agency is recruiting I actually get angry. One of the agencies that annoy me the most with their constant recruitment ( both legal and illegal) is the Nigerian Immigration Service .

If I was President, I'd conscript all of them into the police and have the police open a small unit for immigration service. The only government agency that should actually recruit is the Nigerian Police and this government should be commended for starting that process, the first time in the last six years.

The Nigerian immigration officers are so jobless that when you are leaving the country, three different people will look at your passport. When you are returning, two will look at your passport while one will stand by the line directing people.

At their offices when you go for passports, a chunk of them are outside making cat calls at visitors so they can offer you what they call express service to get your passport.
Getting or renewing your passport is even more cumbersome than getting American and British visas.

In spite of the huge sum spent on our civil service, ease of doing business in Nigeria still remains one of the worst in Africa.

A huge example is export. Normally in a country which is losing its main forex earner, the best thing to do is to promote export. 

But most of young start ups who have tried their hands in exporting have all been burnt by the bottle necks in a civil service where files are still moved from table to table.

Between Nigerian export promotions, Customs and NAFDAC, an aspiring exporter will be torn to shreds by delays, multiple documentation and request for bribe.

While it takes you an arm to export goods from Nigeria, it actually takes little or no stress to import anything into the country.

Until government begins to look at the little foxes that destroys the vineyard of small business in Africa, we'd continue to use crude methods like using enforcement agents and cutting trees to fix prices of foreign currencies .


#FranklySpeaking is a friend of the blog who occasionally contributes to the blog under the pseudonym, #FranklySpeaking. 



  1. Foxes? That's mild. Vampires would've done it.

    Irresponsible Recurrent Expenditure allocation.
    Poor Import/Export policies.
    Dying and Corrupt Civil Service.
    Outrageous Taxation.

    Speaking of taxes, a south south state (with all the Federal allocation, 13% derivation, benefit from NDDC and Niger Delta Ministry) actually has 53 different taxes? 53? Something is VERY wrong with this country...

    1. How much of the taxes even get to federal government coffers. A huge amount is looted on its way. Hahahaha. Government magic .

  2. In Nigeria we know our problems and have solutions but when will the process of problem solving Begin? When will all the great ideas be applied? I'm at a loss on this one.
    A Girl

    1. A girl , this is because our people are very greedy and lazy. Donald Trump was right about Nigeria

  3. This comment has been removed by the author.

  4. study for all sorts of vices.

    Our greed is out of this world.

  5. Like Memphis said... little does not even describe/qualify these vices.
    I always look forward to your write ups!

  6. Very brilliant analysis. I always look foward to this column . Great minds like this should be in govt


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