CLAIM: Did President Buhari’s administration provide an enabling environment for private sector business?
CONTEXT: The President in his speech on 28th May, 2023 said his administration provided a conducive environment for businesses to grow and make profit.
The former president said “Our administration has provided an enabling environment for the private sector to engage in businesses for which their return on investments is guaranteed”
VERIFICATION: Contrary to Buhari’s claim, records have shown that under his administration, many businesses have fared badly, suffering multiple taxation and other harsh economic challenges that saw some of them fold up. Also, a recent report by the Small and Medium Enterprises Development Agency (SMEDAN) revealed that the number of MSMEs dropped from 41 million to 39 million. The drop was attributed to the COVID-19 pandemic and other economic factors.
Also, inflation and monetary policy rates have reached an over 20 year high at 22.22 percent and 18.5 percent respectively, a development analysts and stakeholders say will further worsen Nigeria’s MSMEs growth
A finance analyst, Prof. Uche Uwaleke, said the decision by the Central Bank of Nigeria to further hike monetary rates in May 2023 would stifle credit to Nigerian businesses. According to him, “The hike in MPR to 18.5% is not in the interest of output growth. Access to credit for MSMEs is further stifled,” Speaking further, he said there is no certainty that the further hike of rates would impact on inflation. “Besides, it may do little to halt the upward trend in inflation as recent experience has shown. “Any significant moderation in inflation rate can only come from dealing with supply side factors and structural issues fuelling rising prices such as insecurity, electricity and fuel challenges,” Uwaleke added.
In the same vein,the Organised Private Sector (OPS) recently cried out that increase in taxes and other tariffs are killing businesses in the country.
Taiwo Adeniyi in his address during the association’s 65th Annual General Meeting said that members of the OPS are greatly concerned by the dangerous trend of continuous introduction of new levies, taxes and charges at all levels of government. According to him, in the last one-year, organised businesses have been faced with an increase in electricity tariff without corresponding improvement in service delivery; sky-rocketing diesel and other energy costs among many others.
He said, “We also call on the tax authorities and, indeed, the Federal Ministry of Finance, Budget and National Planning that rather than the introduction of new taxes to fund the national budget and other developmental projects, efforts should be stepped up to expand the tax net and block the numerous leakages in Government institutions.”
Adeniyi said that the impact of the increase in the price of diesel on cost of operation is due to the country’s poor power situation and the reliance on the importation of diesel. He advocated that in the short run, the government can support businesses by providing financial support to SMEs to survive the current high operating cost induced by high diesel prices.
“In the medium and long term, the government needs to focus on the power and refinery production capacity adding that an improvement in the power situation would reduce businesses’ reliance on diesel to power their operation.
“Also, the government needs to intensify efforts to increase the number of functioning refineries in the country thereby increasing domestic production of refined petroleum products, including diesel.
“Improvement in the power situation and an increase in domestic diesel production would reduce expenditure on diesel, and reduce their overall cost of operation,” he added
VERDICT: False
CONCLUSION: Based on a recent report released by the Small and Medium Enterprises Development Agency (SMEDAN) the number of MSMEs dropped from 41 million to 39 million. Also, inflation and monetary policy rates have reached an over 20 year high at 22.22 percent and 18.5 percent respectively.
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