CPPE says businesses closing shop over high energy cost
The Centre for the Promotion of Private Enterprise (CPPE) says high cost of energy is forcing businesses to close shop.
The Centre therefore urged the Federal Government to reduce the regulatory burden on the manufacturing sector and investors in the country.
The CPPE’s Executive Director, Muda Yusuf, in a position paper expressed worry over the “growing incidents of regulatory irritations, distractions, and frustrations inflicted on the Nigerian manufacturing sector and other investors in the Nigerian economy.”
Yusuf said businesses were dealing with exchange rate depreciation challenges, currency volatility, high energy costs, high electricity tariffs, high cost of logistics, weak purchasing power, soaring inflation, high cost of funds, high cost of cargo clearing, and insecurity in parts of the country and did not need to have additional concerns.
Yusuf said many businesses have faced “outrageous fines, penalties, and intimidation,” which have created a hostile environment for investment, adding that public pronouncements by some regulatory agencies impact businesses negatively.
“Public pronouncements by some agencies had the unintended consequences of demarketing local brands, which is detrimental to the country’s aspiration to boost domestic production, grow investment, expand exports, earn foreign exchange, and create jobs,” the CPPE director said.
“These are enough troubles for manufacturers and other investors in the economy,” the economist submitted.
The CPPE notes the disturbing tendencies of overbearing regulatory dispositions, disproportionate sanctions, obstructionist actions, outrageous fines and penalties, intimidation and high handedness.
There are also worries about multiple regulatory fees and levies, duplications and overlapping responsibilities, regulatory repression and weak stakeholder engagement.
The CPPE appeals to the regulatory Agencies to exercise more discretion in exercise of their powers and support the aspiration of the present administration to create and enabling environment for investment to boost domestic production, reduce import dependence, conserve foreign exchange and elevate investors’ confidence.
This does not detract from their primary responsibilities of the agencies to protect consumers, ensure competition, promote standards and quality and protect the environment.
But they do not have to suffocate investors in order to achieve this objective. Public pronouncements by some of the agencies had the unintended consequences of demarketing local brands, an action which is detrimental to the country’s aspiration to boost domestic production, grow investment, expand exports, earn foreign exchange and create jobs.
The regulatory Agencies should appreciate the context in which businesses in Nigeria are operating.
The headwinds are profound and multifaceted, which is why many large companies declared huge losses in their latest financial results as many have shut down; some have scaled down their operations while several others have left the country.
The CPPE believes that the regulatory Agencies can discharge their functions effectively without jeopardizing investment sustainability and growth and should see investors as partners in the Nigerian project for the growth of the economy and not as objects from which to extract financial value of all types.
