Nigerian Archives - BOLLYWOOD SURKHIYAN

Congestion at Nigerian Sea Ports

As at the last count, more than 2000 vessels were still stranded on the high seas of Nigeria’s territorial waters due to their inability to berth at Lagos sea ports. This is not the first time importers and exporters are being made to go through a lot of pain to clear their goods at the nation’s sea ports. Annoyingly, it also appears this won’t be the last. As a matter of fact, congestion at the ports has become a chronic problem. It has been identified as one of the factors responsible for the diversion of Nigerian-bound goods to the ports of Benin Republic and Togo by Nigerian businessmen. No one can blame the importers, because even during non-crisis periods, it is still cheaper and faster to clear goods at the ports of these neighboring countries than at Nigerian ports, which explains why imported goods from Cotonou and Togo are cheaper than similar goods in Nigeria.

Successive administrations in Nigeria have repeatedly given the impression of attempting to address this issue. But none have gone beyond lip service. It is therefore understandable that most observers saw a recent stakeholders’ forum to address the issue of port congestion in Nigeria as another attempt by government to buy time. Many who received the news believed that the game of deceiving Nigerians was about to be repeated. Forum of various types have become a deceitful way of doing things at government ministries in this country. In the end, the only purpose such forum serve is to achieve publicity for government officials by forming part of news items on television network news.

We expect the federal government through the ministries of transport and finance to conduct an independent investigation into the problem of congestion at Nigerian ports so as to objectively identify the true causes of the congestion. A stakeholders’ forum which brings together customs officials and clearing agents cannot achieve anything. You cannot expect clearing agents registered by customs to openly criticize the customs. This is Nigeria; Customs will simply withdraw such agent’s license the next day.

Operators at the ports have often pointed accusing fingers at the Nigerian Customs Service and the Nigerian Ports Authority (NPA). The customs service still insists on manual inspection of all containers arriving at the ports. How many can they check in a day? A full, automated clearing system should be put in place as obtains in other parts of the world. Nigerians also see as disheartening the presence of multiple units of custom officials, all performing similar tasks at the ports. On its part, the NPA should purchase and install modern cargo-handling facilities to replace those epileptic, obsolete and non-functional equipments at the ports. The NPA also needs to jettison its policy of assigning certain vessels to particular ports, as this arrangement makes some terminals congested while others are barely utilized. Ships should be free to berth at any available terminal. Government should also take measures to fully equip other seaports outside of Lagos, such as Warri, Koko, Calabar and Onne sea ports which are grossly under-utilized.

Summary Measures such as these will help in addressing the long-standing problem of congestion at the nation’s seaports. Nigerian businessmen and ultimately the Nigerian economy will be the better for it.

Author: Kenneth J. Agwu

Problems Encountered by Nigerian Entrepreneur and Possible Solutions

The success enjoyed by most industrialized countries can be attributed to the role played by technological innovation and entrepreneurship, both of which continue to drive their economies today. These two factors are seen as key components for the industrialization and development of African countries. The Nigerian government has recognized this fact and has taken measures aimed at promoting and cultivating the entrepreneurial culture in our country. Through the Nigerian Investing Commission (NIC), our government has in the past introduced a policy that required university students regardless of their area of study to take courses in entrepreneurship. While our government is putting extra effort in promoting entrepreneurship in Nigeria, there are still a number of problems that a Nigerian Entrepreneur faces. Below are some of the problems encountered and possible solutions.

* Diversifying the Economy

Though our country’s economy has over the last couple of decades relied heavily on its oil production, we must find ways to diversify our economy and avoid the over reliance on oil. Like other developing countries, Nigeria is facing an increase in its unemployment rate that is now at 6 % and is on the increase, with many graduates finding it hard to get jobs while most of those who get jobs are underemployed. This coupled with the global financial crisis in which massive numbers of employees are being laid off; entrepreneurship is seen as an essential key if we want our country to achieve its ambition of being an industrialized nation by the year 2020.

* Unfriendly Business Climate

Being an entrepreneur in Nigeria requires great determination as practicing and potential business owners are faced with countless challenges. Nigerian’s business climate should be made welcoming to those in the Micro, Small and Medium Enterprises (MSMEs). The role played by these MSMEs should not be underestimated since majority of the thriving businesses fall in this category and for us to achieve our goals, adequate attention and support must be directed towards these institutions. To be able to help and protect entrepreneurs, we must first have a clear idea of the challenges facing our entrepreneurs in their pursuit of making Nigeria a prosperous country.

* Lack of Credit Facilities

Potential Nigeria entrepreneurs go through many hardships when trying to access credit for their businesses. Though there is a wide range of financial institutions that offer business loans, they usually charge high interest rates deterring aspiring entrepreneurs. For instance, major banks have pegged their lending rates to as much a 28% deterring potential entrepreneurs who are mostly low income earners. Other obstacles faced by our entrepreneurs include severe collateral conditions set by banks and other lending institutions. Though our government through the Central Bank and the Banker’s Committee came up with guidelines requiring banks to set aside 10% of their profits for funding MSMEs, majority of these banks have been reluctant to do so. This has led to the emergence of micro-finance institutions which though helpful are not sufficient for meeting the financial requirements.

* Multiple Taxation

One other sensitive challenge that is encountered by majority of Nigerian entrepreneurs is multiple taxation. Although we have a responsibility of funding the government through paying taxes, most of the taxes charged on entrepreneurs are not lawful and have the effect of increasing the cost of doing business. Although Nigeria’s Companies Income Tax Act (CITA) has approved only 39 taxes and levies, there are over 500 various levies and taxes that are imposed by state and local government agents. These taxes are questionable and in the case where they are genuine, they are mostly duplicated and this has the effect of increasing the cost of doing business.

* Poor State of the Country’s Infrastructure

The state of our infrastructure can be deemed to be a nightmare to both entrepreneurs and the rest of the country’s population. With the existing infrastructure deteriorating and in some places it is non-existent; the cost of doing business has tremendously gone up. The state of the country’s road network makes it hard for entrepreneurs in the agricultural sector to transport harvested produce from farms to processing factories. According to a report released by the World Bank, Nigeria’s pace of socioeconomic development and growth is way below what we can achieve. This is mostly because of the erratic supply of electricity which has negatively affected many businesses. The outcome of power problems has prompted entrepreneurs to generate power through expensive ways that have in turn increased their production costs and made their products uncompetitive due to high prices. Our government should put policies in place to perk up Nigeria’s infrastructure so as to promote successful entrepreneurship.

* Failure to Adapt to the Changing Business Environment

Majority of those who venture into MSMEs (Micro, Small and Medium Enterprises) do so because of their need to make money and in almost all cases, such entrepreneurs lack relevant and adequate information about the businesses they engage in. In the event where problems arise, most of these business owners lack sufficient problem solving skills and in the end they find it hard to survive. With the telecommunications sector having grown by about 206.5 % between 2002 and 2004 and is continually expanding, Nigeria has become one of the fastest growing ICT market not only in Africa but also worldwide. This presents a challenge to entrepreneurs who have not embraced technology, and who are now finding it hard to remain relevant in the competitive business environment. For existing and potential MSMEs to survive and be relevant, we must adapt to the changing business environment and embrace technology.

* Addressing the Challenges

Solving the problems encountered requires a combined effort by both the entrepreneur and all concerned stakeholders. As Small and medium business owners, we need to increase our knowledge and skills of the market by acquiring relevant and up to date education particularly in your area of business. Our entrepreneurs need to collect information about their target market by seeking help from consultants and professionals who have experience in the particular market.

One strategy that can be used by our small and medium entrepreneurs to remain relevant and competitive in today’s market is to come up with fresh and creative ideas of doing business. Due to the increase in technology, business is fast changing, thus our MSMEs need to constantly re-invent the way they do business.

There is a great need of creating a strong link between MSMEs and supporting institutions if Nigeria is to fully benefit from such businesses. Though some financial institutions are still reluctant to provide financial assistance to MSMEs, there are some that give out loans at reasonable rates provided the business sounds viable. The key challenge is for our entrepreneurs to prepare sound business proposals. For our country to achieve its goals and stop relying on oil alone, we need to focus much attention needs on the private sector and our government must create a conducive atmosphere for such businesses to thrive and drive the country towards economic prosperity.

Understanding Entrepreneurialism and Its Relevance to Nigerian Society

Entrepreneurialism is an important factor in the development of any nation. Entrepreneurs are responsible for taking calculated risks that open up doors to progressively higher levels of economic growth. If it weren’t for them, the world would never have knows such marvels as the wheel, electricity or the Internet, to name just a few.

Entrepreneurs are the veritable backbone on which the world and modern ideas continue to develop. The magnitude and reach of their contributions, however, extend much beyond the world of business and economy, and to them goes irrefutable credit for the growth and evolution of societies at large. Developed nations across the world owe their current prosperity to the collective effort of intrepid entrepreneurs, on whose innovation also rests the future prosperity of much of the developing world.

The larger rewards of risk-taking, starting an enterprise and developing it into a successful business venture extend well past its immediate beneficiaries. The scope of financial freedom and flexibility that entrepreneurialism allows is a means to simultaneous individual and national prosperity. If this holds true for economies around the world, it has especially relevance for Nigeria, which is at the cusp of a new era of progress.

History of Nigerian Entrepreneurship

Nigeria is home to people of the Ibo culture, an extremely resourceful ethnic group that is known for its traditional entrepreneurial prowess. Consequently, this well-endowed sub-Saharan nation has a strong undercurrent of enterprise running through its veins, which has helped it survive and emerge out a long and difficult history.

Inheriting a fortune in oil and gas reserves after ceding from British colonial rule in 1960, Nigeria’s early regimes banked heavily on non-renewable resources to generate rich returns. The oil boom of the 70’s marked a period of tremendous national profit – an aggregate of more than $600 billion over four decades. However, civil strife and political uncertainty spawned an atmosphere of disregard for inclusive growth, eventually brining about a steady decline of agriculture and traditional industries. The outcome was the creation of the ‘Nigerian Paradox’, a situation of huge economic disparities that drove most of this resource-abundant country’s population into desperate poverty.

Traditional Nigerian entrepreneurship began in a climate of economic stagnation and as a purely survivalist endeavour. Dismal human development indices, unemployment and infrastructure deficits resulted in the evolution of a massive informal economy that depended almost exclusively on personal initiative and hazardous risk-taking capacity. This vast, unorganised sector, covering a wide range of products and services, quickly filled the gap left by subsequent decades of misrule and failed economic policies. It is ironic, to say the least, that the Nigerian informal economy has now grown to a stage where it contributes over 65% of Gross National Product, and by the government’s own admission, accounts for 90% of all new jobs in the country.

Entrepreneurial resurgence

The return of democracy in 1999 ushered in a period of economic reforms and a renewed focus on enterprise development as the only viable means to sustainable growth. Nigerian leaders initiated a massive programme of disinvestment and financial deregulation aimed at boosting business development across the Micro, Small and Medium Enterprise (MSME) space. Progress has been hampered by institutional deficiencies and widespread bureaucratic and political corruption, although it is still too early to comment on the long-term accomplishments of Abuja’s renewed efforts at jumpstarting the economy.

One of the primary reasons why the country struggles to keep up with the developed world despite its considerable human and natural resources is a lack of progressive and holistic policies. Nowhere is this more apparent than in the case of education. However, in pursuance of the Millennium Development Goals and its indigenous 2020 target, the Nigerian government has in recent years made tangible efforts to enforce universal basic education and mass adult-literacy programmes that it hopes will allow Nigerians to compete in the business world. The focus on education, particularly on vocational training and skills-development, is a conscious effort to engender entrepreneurial vigour among its substantial population of 148 million, more than half of which lives in extreme poverty. Private and international aid agencies have collaborated and extended support in this direction: the United Nations Transfer of Knowledge through Expatriate Nationals scheme, for instance. Educating potential entrepreneurs and equipping them with the skills necessary for success remains a key priority.

The final aspect of Nigerian entrepreneurship is export, which has primarily been limited to non-renewable resources. However, export in the non-oil sector is an equally vital instrument for accelerated growth, and a significant area for emerging entrepreneurs to get involved in. Trade with countries in Europe, Asia and the Americas is a potential boom sector, more so in light of a new tax regime that is intended to promote emerging businesses.

Challenges Facing Enterprise Development

Despite recent achievements that prove Nigeria’s potential for entrepreneurial triumph, there is little doubt about the severity of constraint on the road ahead.

One of the principal problems is very simply the fact that Nigeria is not perceived as a promising business destination. The high cost of doing business, corruption and systemic flaws in the country’s economic policies have cumulatively succeeded in keeping off potential investors. Massive infrastructural deficits, particularly with regards to roads and electricity, are further turn-offs. The most significant aspect of the problem, however, is Nigeria’s nascent and shaky polity, constantly under threat from civil intolerance and rising religious extremism.

Social problems, growing out of deplorable human development indicators in the absence of inclusive growth, form the second significant obstacle for Nigeria. The status of women and their traditionally limited involvement in entrepreneurial activities is a significant drawback from the perspective of rapid social and economic growth. The issue is further compounded by a catastrophic divide in the condition of rural and urban populations.

Entrepreneurialism is the foundations of any developed nation. For Nigeria to reap the full benefits of a dynamic and evolving economy however requires the overcoming of entrenched social, financial and political hurdles. Informed government policy, education and international participation are crucial for Nigeria to shake off its third world heritage and achieve the full breadth of its economic potential.