The Nigerian economy has been in turmoil for the better part of 2016 following the drop in the price of crude oil and the negative impact it had on government’s revenue. This resulted in a dip in Nigeria’s foreign reserves triggering a gradual and continuous depreciation of the value of the Naira. This then triggered a rise in the cost of goods and services, reduction in consumer expenditure, lower profits for companies and a rise in bad debts in the books of commercial banks. In a nutshell, this has resulted in recession. And private business owners are not left out either.
But who says this recession will devour business startups, or in other words, who thinks startups cannot survive this recession? Yes, they can. And to be sure they can, these 10 rules of engagement can help every business startup avoid being a victim of this current economic tsunami.
In the world of business today, you have 3 choices to make: Get better, get smaller or get kicked out.
It’s your choice.
Rodl & Partner has entered the Kenyan market focusing on offering legal, tax, audit, and management consultancy services to SMEs, tech start-ups, and family owned businesses. Prof.Dr. Christian Rodl, Global Head of Rodl & Partner speaks on the development and growth rate of Kenya while advising on several other ways to boost the economy. Kenya was ranked 108 in the 2016 Ease of Doing Business ranking by the World Bank, up from 129 in the 2015 rankings making it the 3rd most improved country in the World.
Our affiliate office is strategically situated at 4th Floor, KAM House (opposite Westgate Mall), Peponi Road, Westlands, Nairobi Kenya. Headed by George Maina and a robust workforce, the team is dedicated to provide cutting edge solutions to complex legal, tax and management issues affecting the growth of the country’s economy. “There is an urgent need for the government to divest and allow tax payers monies yield reasonable results” George said while suggesting further strategies to boost the economy.
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Disruptive innovation was explained by Clayton Christensen of Harvard Business School in his book “The Innovator’s Dilemma”. Disruptive innovation is “an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market leading firms, products and alliances”. Thus, the term is used to describe innovations that create new markets by discovering or aggregating new categories of customers, partly by developing new business models and harnessing new technologies.
Netflix is a good example of disruptive innovation, switching from the old business model of sending out rental DVDs by post to customers to a new business model where it streams on-demand videos to its customers. In many instances, disruptive innovations usually find their first customers at the bottom of the market pyramid; hence they usually use a market penetrating strategy in their pricing models. Market incumbents are usually either unaware or too comfortable to recognise the threat that the new starters (disruptors) pose to their businesses and markets, until they start eroding their traditional market base and end up reshaping the entire market. We have other examples of successful disruptors such as record stores (iTunes), taxis (Uber), long distance calls (Skype and Facetime), newspapers (online blogs, twitter, etc.) and libraries (Google).
In recent times, we have experienced some other disruptive innovations in Nigeria. BAU, an organisation being led by a young Nigerian, is introducing quality executive education programs to SMEs and individuals at very affordable rates. Shopping malls are gradually overshadowing our local markets, apart from the various e-commerce websites with home delivery packages. Banks such as GTB and Fidelity Bank recently introduced new ways to initiate banking transactions using the mobile platforms (*737* for GTB, *770* for Fidelity Bank, etc.). Uber, starting from mid-2015, is offering newer and neater vehicles for transportation at very competitive rates (apart from the convenience and safety of the passengers) and it is gradually signalling the end of the “yellow taxis” in Lagos.
Based on a recent industry report from its Business Connection Group (BCG), Roedl & Partner (a professional services firm providing market entry advisory and business match-making services) has suggested that that the most unexpected disruptive innovations in Nigeria might come from entrepreneurs (local or foreign) who are inventing new ways of delivering healthcare for a fraction of the fees of the current leading healthcare providers.
The Nigerian health system has been primarily public sector driven and in principle, decentralised into a three-tier structure with responsibilities at the federal, state and local government levels. The health system is divided into primary, secondary and tertiary healthcare providers. The primary healthcare providers, known as comprehensive health centres, are meant to be the first point of call for medicare. Such comprehensive health centres should have about three doctors and should offer some secondary clinical services in addition to the primary health care services. There should be at least one health centre in every local government area. Patients are to be referred to the secondary healthcare providers, referred to as “General Hospitals” (managed by the state governments) if the health centres will be unable to handle the required level of care. The tertiary healthcare providers, teaching and specialist hospitals are the final “bus stop” for healthcare delivery.
The federal government is responsible for policy and technical support for the entire national health system and the provision of services through the tertiary and teaching hospitals. The state governments are responsible for the secondary hospitals (“general hospitals”) and for the regulation and technical support for primary healthcare services. Primary healthcare is the responsibility of the local governments. While this structure appears seamless and well-coordinated, there appears to always be confusion of roles and responsibilities, thus leading to weak coordination and poor performance tracking.
In these three levels of healthcare service delivery, which are predominantly public sector managed and funded, it appears that the entire chain of healthcare service delivery is, in a lot of instances, in comatose and thus should itself be placed in an “intensive care unit” to revive the sector. Government funding for health appears to have been improved over time, but it is still generally considered as low when health spending per capita is compared with other developing countries. Fluctuations in public funding, poor management of the health facilities, poor coordination of national health programs between the three tiers of government, and political interference limits the efficiency and effectiveness of the healthcare service delivery.
It is no longer news that many health centres in many local governments do not have experienced nurses – lets not talk about doctors. In many (if not, most) of the government hospitals, patients have to sleep on the floor or in the car park due to insufficient beds, surgeries are being done in darkness due to absence of alternative power supply, patients are abandoned due to strike actions as a result of recurring conflicts between the various levels of government and medical doctors, demotivated medical personnel due to irregular salary payments, insufficient medical equipment and diagnostic tools, basic amenities such as bathrooms and toilets for patients are practically not in existence, etc.
Recently, I had the opportunity of having a “business” discussion with a group of medical doctors. One of the key take-aways that we agreed at the discussion is that the training of medical doctors (at least, in Nigeria) does not adequately prepare medical doctors for leadership and management roles, not to talk of entrepreneurship and business management. This is probably partly responsible for the limited innovations in the healthcare sector despite the several opportunities that are available in that sector. We discussed the failures of some private hospitals in Lagos and some of the gaps in the ones that are still managing to survive (e.g. poor customer service, poor record keeping, very high consultancy and treatment bills, high turnover of medical personnel due to use of “locum doctors”, etc.).
The general “Nigerian” syndrome in many businesses also affects the health industry. Nigerians like titles and accolades – we prefer to be the Founder/Chairman/Chief Medical Director of a very dysfunctional small clinic (using a very large building and thus having low occupancy rates) than being part owner of a functional and profitable hospital. In many of the private hospitals, the entire organisation is built around the founder. I have always wondered why medical consultants usually want to own a large multi-specialist hospital whereas their counterparts in other nations will have a small facility consisting of a reception area, consulting room and probably just two small rooms for administering immediate care and monitoring progress before referral to the teaching hospitals.
The above gaps in the healthcare service delivery in both the public and private healthcare organisations create huge opportunities for innovative disruptors in the healthcare industry. The industry report from the BCG team of Roedl & Partner concluded (and rightly so) that the huge population of low and middle income earners in the urban centres like Lagos, Port Harcourt, Abuja and Kano, coupled with the poor service delivery in government owned healthcare organisations and the expensive charges from the not-so-better alternative private sector providers, provides a huge opportunity for an innovative disruptor to consider a privately owned social enterprise that will operate a national network of health centres that will be reasonably equipped with diagnostic and laboratory equipment.
Based on the proposals in the exclusive report from Roedl & Partner, the business model could be structured in a way that the operating company will provide medical personnel and manage the national network, with contracts with foreign suppliers of medical equipment and devices (such as lease arrangements and equipment placement partnerships) and the deployment of a web-based medical record system (that allows the records of a patient to be retrieved anywhere in the country as soon as the patient provides certain information such as name, phone number and customer ID). The report also recommended that the disruptor might also consider a strategic alliance for mobile medical insurance with mobile phone operators and an insurance company.
Based on Nigerian laws, it is possible for entrepreneurs outside of the medical profession to invest in the healthcare sector. There are also some incentives that could be benefitted by foreign investors in this sector. The opportunities are huge, the market is there, but time will tell.
ABOUT THE AUTHOR: WF Oluyemi is a chartered accountant and business advisor. This post was originally written for the periodic newsletter of WFO Roedl & Partner, a professional services firm providing accounting, tax, advisory, business process outsourcing, company secretarial services, market entry advisory and business matchmaking services. Roedl & Partner, headquartered in Germany, is present in about 110 locations globally.
Published on July 31, 2016 by Oluwole Oluyemi. Accountant and Business Advisor | Corporate Strategist | DBA Candidate | Educator |
I have been asked by several people as to why Nigeria is challenged from realizing its full potentials as an investment destination, especially some who believe that I have a bias towards some of the ideals of the apostles of CHANGE.
While I agree that “change” is different from “miracle” and hence it might not give immediate results, we also need to realise that “change” is a verb and it requires a set of actions. Insanity, however, is doing the same thing over and over, and expecting a different result. So, as part of the change process, what are we really doing to change our status to attract more foreign investments into the country?
Where are we?
In order not to be accused of joining the array of overnight Nigerian “beer parlour” economists, I will like to place reliance on the annual reports of two respected global institutions – the World Bank and the World Economic Forum. I have summarized the rankings from these organisations in Table 1 and Table 2.
Based on the two rankings:
• Nigeria shows a steady decline from 2008 to 2014 on both rankings.
• Nigeria shows a marginal improvement in 2016 when compared to 2014 on both rankings
• Nigeria is not an attractive Top-5 investment destination in Africa, based on both rankings.
• Africa’s Top-4 countries are consistent on both rankings. This means that …”if you are there, you are there…”
If the rankings had been produced in Nigeria, one could label such reports as being the handwork of “wailing wailers” or “yesterday’s men”. Since the reports are coming from credible organisations, then we must all take the reports very seriously.
How did we get here? How can we get out of here?
As a Nigerian, while it is a bitter-pill to accept that South Africa is ranked higher on both rankings, despite our self-appointed tag as the biggest economy in Africa based on GDP size (not even GDP per capita), it is sad that countries such as Rwanda, Botswana and Mauritius are occupying Top-4 positions in Africa on both rankings.
While trying to analyse the reports, I was able to pencil down eighteen (18) issues that, in my personal opinion, could have contributed immensely to the poor rankings that Nigeria got on those two reports. These issues should be part of the focus of the President Buhari’s administration, especially Ministry of Finance and Ministry of Investments, Trade & Industry (MITI). The issues include the following:
Delays in the Company Registration process: Incorporation of companies is the primary function of the Corporate Affairs Commission (CAC), a government agency under the Ministry of Investments, Trade & Industry. At different times, many of the supervising ministers have announced to the world that incorporation can be done in one day. On the average, it still takes an average of about 24 days to complete a simple company incorporation at the CAC. The issuance of the certificate of incorporation is also sometimes delayed due to “server problem” or “faulty printer”. In many top-ranked countries, it takes less than a day to incorporate a company. In most developed nations, you can even make a preliminary search for the proposed company name online (to check name availability) and then submit your applications with necessary payments online. This is where we need to get to.
• Annual Filing Requirements needs improvement: Annually, CAC threatens company promoters that thousands of companies on their register will be delisted. But really, what is the real consequence for not filing annual returns for a Company? Nothing! So, what can the government do? If the Company’s Incorporation Number (CIN) is used as a major field in setting-up the bank accounts and all bank accounts are suspended if they default in filing annual returns, then there might be an incentive to file returns. However, the process of filing annual returns with the CAC needs improvement. Companies should be able to file their returns directly from the CAC’s portal, upload necessary documents and e-signatures, in addition to making all necessary payments directly on the portal.
• Registration of Foreign Investments: The Nigerian Investment Promotion Council (NIPC) regulations require the registration of foreign capital with the NIPC. This is another bottleneck in the company set-up process, which can be embedded as part of the normal CAC registration.
• Certificate of Capital Importation: As part of the Exchange Control regulations, any repatriation of dividends or interests will only be approved if there is a Certificate of Capital Importation (CCI) that is obtained within 24-hours of bringing the capital into Nigeria. NIPC registration is sometimes required to process the CCI. In many instances, company executives become aware of this CCI requirement when they want to pay dividends to their foreign investors, sometimes 2-5 years after the initial investment by the investor. This means that the investment is somehow trapped as some (or most?) bankers are usually indifferent to the customer’s plight.
• Online Company Checks: In order to enhance business partnerships and alliances, CAC needs to make it easy for prospective investors (or business partners) and other stakeholders to be able to check the basic profile (shareholders, directors, historical shareholding changes, historical changes in directorship, share capital structure, company secretary, filing status, etc.) of registered companies from the CAC portal, at a fee.
• Complexity of Company Taxes, especially for SMEs: While I agree that tax computation is not one of the easiest tasks to do anywhere in the world (hence the need for chartered accountants and tax practitioners), many countries have simplified the process for the SME operators in their countries. As is typical for most SMEs, they are usually sole-proprietorships, partnerships, family businesses and private closely held companies, usually with no developed business structure where there is an in-house tax accountant. In some countries, taxation of SMEs (based on the specific definition of SME for tax purposes) is computed as a fixed and pre-defined percentage of their revenues (e.g. 6% of revenues). This proposal can be implemented without any change to our current tax laws. This makes it easier for SMEs to compute their taxes and comply with the tax laws. It also makes it easier for the tax agencies to audit such SMEs (using their bank statements, WHT information, etc.) who constitute a large nominal portion of the tax payers. This will ensure voluntary compliance and increase tax revenues.
• Multiplicity of Taxes: I was invited by some potential investors to present a paper on the investment opportunities in Nigeria, sometime in 2014. During the program, someone asked me to mention the key taxes and levies that they must be aware of. I didn’t know that someone was writing down the list of the taxes and levies I was mentioning. By the time I was done, they asked me how they are expected to monitor and ensure compliance with about 24 taxes and levies (in addition to their business operations). The taxes and levies I mentioned include the company income tax, education tax, PAYE, ITF, Pension, NHF, VAT, WHT, Local Content Levy, NCD Levy, Cabotage Levy, NITDA Levy, NCC Levy, Television license, car park permit, business premises permit, tinted car window permit, Signage permit, etc. Of course, I carefully excluded “area boys” levies which you might not be able to avoid if you have to transport your goods from one location to the other. In most of these taxes and levies, businesses are practically paying taxes on the same or substantially similar tax bases. The Federal Government needs to consider streamlining the “Approved List of Taxes” to ensure that taxes and levies are reduced to the barest minimum.
• Nuisance Taxes: Due to the Federal structure of Nigeria, there are different taxes that are collectable by different levels of government. Businesses, especially those in the urban centers like Lagos, Port Harcourt and Abuja, are inundated with several requests from unprofessional and untrained individuals who have been employed by, usually a local government, to enforce collection of taxes and levies on behalf of the local government. The Joint Tax Board (JTB) needs to develop a process to ensure that only professionally trained personnel are involved in tax assessment and collection at all levels.
• Fixed Assets – Certificate of Acceptance: Companies are required to apply and obtain a “Certificate of Acceptance” from the Inspectorate Division of the Federal Ministry of Industry for any individual assets purchased that is above N500,000. This is required before such Companies can utilize the capital allowances (computed based on the cost and type of the asset) as a benefit to reduce their tax payable. This requirement is of no relevance and creates addition bottleneck (ingredient for corrupt practices) without any real value. This requirement should be discontinued.
• Minimum Tax: Companies are required to pay a “minimum tax” even when they can prove that they made losses during the period under review. However, the law exempts companies who are within the first four calendar years of business commencement, companies with 25% of foreign equity contribution, and companies in agricultural trade or business. While some may even argue that this law is discriminatory (because it does not apply to entities with significant imported equity), the implication of this requirement is that companies are being required to pay taxes out of their capital since they did not make any profit from which taxes are normally expected to be paid from. This discourages investment and increases the risk of failure for companies in periods of low profitability or losses.
• Excess Dividend Tax: The relevant provision of the law is usually interpreted by the tax agencies to levy tax on a company whose dividend exceeds taxable profit regardless of whether the profit being distributed has already suffered tax (as in the case of income already taxed in a preceding year but retained in the business due to cash flow planning, or dividend income received by a holding company) or whether the profit now being distributed is exempt from taxation (such as profit during a pioneer tax holiday). The Federal Government should consider amending the tax laws to specifically exclude taxed profits and profits previously exempted from tax.
• VAT Remittances: Based on the tax laws, companies doing business in Nigeria are required to charge Value Added Tax (VAT) of 5% in their invoices. Businesses are expected to file monthly VAT returns, supported with a listing of the invoices issued during the period, along with the payment of the VAT charged thereon. The implication is that businesses are required to remit VAT based on invoices and not necessarily based on whether the payment has been received from their customer or not. This creates a significant working capital pressure on businesses, especially when there is a one-off huge contract invoice.
• Double Taxation Treaties (DTT): Nigeria currently has double taxation treaties with only 13 countries – Canada, Pakistan, Belgium, France, Romania, Netherlands, UK, China, South Africa, Italy, Philippines, Czech and Slovakia. Netherlands has a wide treaty network with about 110 countries. The UK has treaties with over 80 countries while South Africa has over 60 including treaties with major countries such as the United States. In order to be competitive and encourage investments in Nigeria, Nigeria must seek to expand its double tax treaty network and provide unilateral relief where there is no double tax treaty. In addition, the Federal Government should also review the tax treaties it currently has with the thirteen countries to determine if Nigeria is truly benefitting from these DTTs. Where it is established that Nigeria is not, re-negotiating and amending key clauses of the DTTs should be considered.
• Need to Deploy and Harmonise Processes to Minimise Tax Evasion: Companies should be automatically registered and tracked for tax purposes as soon as they are incorporated. In order to reduce tax evasion, the Federal Government should consider amending the relevant sections of the Companies and Allied Matters Act (CAMA) to require the submission of the Company’s Tax Clearance Certificate (TCC) as part of the annual filing to the CAC. The submission can be done by linking the Company’s tax profile to the CAC database. In fact, the Company’s Incorporation Number (CIN) should be linked to the Tax Identification Number (TIN) that is currently being used by the tax agencies.. In the future, the CIN should be the primary identifier for companies, including for tax purposes. For individuals, their Bank Verification Number (BVN) could be used as their primary identifier for tax purposes. Furthermore, the procedure for withholding tax remittance makes it mandatory for all beneficiaries of withholding tax remittance to have TIN without which the customer will not be able to remit the withholding tax. This means that a non-resident investor who only earns dividend income from share investment in Nigeria is expected to register for income tax. This procedure should be revised to exclude non-residents who earn passive income (rent, royalties and interest) from Nigeria.
• Commencement, Change of Accounting Dates & Cessation Rules in Tax Computation: The relevant tax law (Companies Income Tax Act) prescribes the rules for the taxation of a company during commencement of business, change of accounting date and cessation. These rules create complexity and additional tax burden on tax payers. For example, the commencement rule often leads to double taxation on a company at its early stage. In addition, tax computation becomes complicated where a company changes its accounting date or ceases operation within the first three years of commencement (due to the overlap between the commencement rules and cessation rules). Taxation should be strictly based on accounting period using preceding year basis, as is the norm in developed and fast-growing economies.
• Acute Infrastructural Deficiency: Nigeria produces less electricity than what a German city consumes, despite our huge population. The costs of maintaining the power generators increase the cost of doing business. The logistics of getting fuel for the generators during the frequent fuel scarcity is also a big challenge to businesses. There must be a conscious and well-articulated plan to improve the power situation in the country. Similar challenges exist in transportation and security infrastructures. Investors want to be able to operate their businesses without the risk of kidnapping, armed robbery and now lately, bomb explosions due to the actions of insurgents. Safe roads and reliable airline networks (that will not delay flights for 8 hours without any apology) is also a business enabler.
• Delayed Access to Justice during Business Conflicts: Business investors normally prefer a business environment where they can have easy access to justice in the event of business conflicts and disagreements. There are many business cases that are still in court and still undecided, despite being on for more than five years. The Nigerian judiciary system has endured prolonged delay in the administration of justice, congestion of courts, inadequate infrastructure and lack of timely access to justice, the congestion of prisons with the daily influx of accused persons or suspects awaiting trial, the persistent issue of the holding charge, arrest of suspects’ relatives in place of suspects, the perceived use of torture by the police to extort extra judicial confessions and allegations of corruption against judicial officers.
• Corruption Perception: Nigeria is generally perceived as a highly corrupt country. This tag, irrespective of whether it is correct or not, is a discouragement to some potential investors. While the Economic and Financial Crime Commission (EFCC) has been busy taking several people to court, there has been no single conviction for any high profile corruption case in the recent years. This tends to make it look as if the country is paying lip service to the fight against corruption.
Quo va dis?
Since we have the grand plan of being part of the top 20 developed economies by the year 2020 (or have we moved the target to 2030?), then we need to start focusing on the above mentioned factors of business competitiveness in Nigeria, with a view of eliminating bottlenecks, simplifying and enhancing processes to be more efficient and effective, gradually transform our government agencies to become more business friendly, and ultimately increase our national income through improved trade and higher tax income.
By Oluwole Oluyemi FCA, FCTI, CIA
There has been a strong debate on the issue of street trading in Lagos for the past few days. This is definitely due to the Lagos State government’s (LASG) reaction to the unfortunate death of a Lagos resident and hawker who was knocked down by a vehicle while trying to escape arrest by one of the government’s agencies.
The debate has centered mainly on security (for those who support the position of the Lagos State Government) and on the “Rich versus Poor” argument (for those who perceive the government’s action as a war to decimate the poor in the society).
In 2003, the Tinubu’s administration in Lagos State, introduced the “Lagos State Street Trading and Illegal Market Prohibition Law”. LASG, in reaction to the unfortunate death of the hawker, announced the full implementation of the law with effect from 1 July 2016. LASG cannot fold its arms and allow the citizens to be mauled down by vehicles just because they want to make a living as street hawkers. I also believe that child hawkers are not to be encouraged on our expressways. In addition, there is no crime in enforcing an existing law. While I support the implementation of this law, especially knowing that many crimes are being committed on our expressways using these street hawkers as informants and/ or perpetrators, I believe that a gradual and phased implementation could have been more appropriate.
Why should LASG issue a threat or seek to implement a law when there is really no apparatus to ensure reasonable or full compliance? Have we been able to stop OKADAs from the major expressways? Have we been able to stop touts (Agberos) from controlling our motor parks? Have we been able to stop people from issuing and collecting fake tax clearance certificates (I am not throwing shades at my friends in Abia State at the moment)? For me, these are issues that LASG should consider in details before rushing to enforce the law. The truth is that we do not need laws to drive behaviours every time, sometimes, we just need to provide alternatives. Let us remember that Babatunde Raji Fashola (BRF) effectively phased out the “Molue” (those old and rickety buses) from our major expressways without promulgating or enforcing any law – BRF’s government created alternatives (BRT buses and the licensing of corporate car hire companies). Thanks also to the arrival of UBER in Lagos last year. This is already creating a good alternative to those rickety yellow taxis. There is definitely more to public policy than the enforcement of laws.
The interesting thing about this negative response to the LASG action is that the strongest voices against the action has been from the middle and high-income earners, and not necessarily from the “poor” residents as the pro-LASG narratives tend to suggest. These groups of residents are the people that will be impacted by the government’s decision – because they patronise the street hawkers and some even use the street hawkers as an efficient and cheap distribution network for their products. Personally, I have bought several packs of Gala (from UAC Plc) while in traffic and I can’t remember ever buying the product in any fanciful store anywhere.
In every market, there must be both buyers and sellers (and the suppliers to the sellers!). The sellers are being patronized because they are meeting the needs of some people. So, why do people patronize the street hawkers? The answer is simple. The first answer is CONVENIENCE. If you are passing through a 3-hour traffic to your house after a busy day at work, then the plantain or bread or groundnut hawker might be your savior (because all the fanciful supermarket in your neighborhood could have closed their stores before you get to your homes). The “pure water” or “bottled water” and the “Gala” sellers have been saving lives since I’ve known Lagos traffic. The second reason why street hawkers are patronized is PRICE. Why should one go to Shoprite (or other similar fanciful stores) to buy plantain at N1,100 when a similar quantity is being sold at N600 in the legendary Ajah traffic? Simple economics! This is what Senator Ben Bruce will refer to as “common sense”.
So, what can LASG do? LASG needs to recognise that the street hawkers are entrepreneurs and most of them are law-abiding citizens who chose street trading as a way to make ends meet. Is there a possibility that some of them might be interested in learning a trade or vocation if provided a good and affordable platform? I think so. LASG can leverage on “Corporate Lagos” to sponsor new trade and vocational centres. The Dual Vocational Training (DVT) program that is being sponsored by the German Government in Nigeria might be a good model to start tinkering with. Graduates of such programs can be organised into cooperatives and provided with spaces for “Neighbourhood Stores” under a “license arrangement” with a government agency. I believe that such an arrangement could also attract organisations like the Bank of Industry (BOI) that can provide loans to such cooperative societies.
LASG also needs to remember that the poor masses are part of any society, even in the US or UK or Germany. In our quest to project the “modern Lagos”, we have consistently pulled down the markets and related infrastructure that are easily affordable to the masses and replaced them with the “high end” stores. Tejuosho market is a perfect example of such a policy agenda that worked against the poor masses. If we stop these hawkers from being able to earn legitimate earnings, we might be indirectly pushing them into kidnapping, robbery and other illicit businesses. Unfortunately, they will still come after the people in the “modern Lagos”.
In every public policy, there are usually trade-offs. For the ban on street hawking to have a human face, LASG must be ready to provide clear alternatives that will still meet the need of the market (Lagos residents) while also eliminating the security threats and the dangers that the hawkers are exposed to.
I believe in an inclusive modern Lagos. Eko o ni baje. God bless Lagos.
By Oluwole Oluyemi FCA, FCTI, CIA
WF Oluyemi, a chartered accountant and corporate strategist, resides in Lagos.
WFO’s Accounting Advisory Services (AAS) is a dedicated team of accounting specialists with in-depth knowledge of accounting requirements in addition to practical commercial experience. Our professionals tailor their services to meet our client’s needs by working with the clients to help them achieve compliance, advising on how they might organize their financial reporting processes and helping ensure that accounting operations match the objectives of the business, through a range of services, including: (more…)