 You're welcome back. It's still the breakfast on Plus TV Africa, and right now we're trying to look at the success rate of small businesses in the Nigerian environment. And we're glad to be joined by Dr. Femi Egbeshola, National President, Association of Small Business Owners of Nigeria. Good morning and welcome to the program, sir. Good morning. Thank you for having me. Okay, let's just begin with seeing the business environment, the Nigerian business environment through your own eyes. How would you describe it? Well, the current business environment is very, very harsh. It's the harshest in our history. It's very tough for business owners, particularly those that falls in the category of random micro-small and medium businesses. Quite a number of businesses has folded up. And according to Smidon, that is small and medium enterprise development agencies of Nigeria, in the last two years, over two million businesses have closed shop. And that's an indication that things are not right with business environments. And we also discover in our own association that over 20% of our members have also closed shop. And that's not good news. Okay. What are some of these things that are making the business environment as harsh as you are putting it? Well, to start with, inflation is at the highest peak. The inflation we have with the country at the moment is what we have never experienced before. And that has reduced the purchasing power of the consumers. So the consumers can no longer afford to buy at the quantity of the kind of particular product or service they need, as they should do. And that has reduced cash flow for businesses. The energy cost is another thing. In the last two years, also, we have experienced about 300% increase in energy costs. Taxes also have gone up. Nearly the taxes were reduced. And the existing taxes were even jacked up. We have issues of multiple taxation here and there. There is no access again to finance for those who belong to this category of small businesses. Before now, it was even a bit easier to access cash. But now it's very difficult to access load. And that's one of the reasons it's because the interest rate is at the highest head. At the moment, now banks give out interest at interest rate of 26% to 30%. And when you decide to go to other financial institutions like the Microfinance Bank or Finitech, you get as high as 60% to 80% interest rate per annum. What kind of business will you do with that? Forest is also unavailable. Quite a number of our raw materials that we use for businesses are being imported from overseas. Forest is not available. So you have to go to the parallel bankage. And the parallel bankage is offering you a price that is anti-business. And with that, it is almost impossible for you to do business. Someone doing a business with the cash flow of 100 million the last two years will have that particular fund doing a business of 20, 30 million this year because of the rate of forest released to us in the parallel market. We also have infrastructure issues. Quite a number of infrastructure in DK are in deficit. Many of the roads are bad. If you look at today, quite a number of farmers cannot transport their produce to the city because the vehicles cannot even go to the internet to move those produce to the city. The energy cost is there. It's and it's continued on the rise. We have the issue of telecommunication too as one of the infrastructure and deficit we have. It can telecommunication in the sense that we have so many interlands that do not have access to internet where they can use data and internet to do their business. For example, talking about the cashless policy for it to be able to transact cashless. You need internet to be able to do your business. Some of these areas do not have internet facilities to speak. And then the issues on and on and I can continue to talk about that. OK, well, a layman would say that when there is inflation is the people that suffer not really the businessmen because they just dump whatever they are suffering on the people. So you buy things costly and then you add the price people get to buy the final consumer is the one who really suffers it. But if your association of small business owners is crying, every other association is crying, manufacturers and all that they are all crying. Help us understand how it affects the manufacturer, how it affects the business owner, even when we think that is the final consumer that bears the brunt or feels the pain. Well, as we speak today, the majority of our population are those that are employed and that is those that are collecting salaries at the end of the month. We have not seen salary increase for the past few years. And if a salary if a salary is getting, say, 50,000 per month, so to speak, and then he can afford to buy certain products before now that inflation has come up and then a particular product is buying for 2000 and he used to buy, say, 10, maybe one of his groceries say 10 in a month for his family. And that particular product goes to a price of as high as now 8000 and the salary has not increased. What it means is that instead of buying 10, he would end up buying maybe three or four. If he ended up buying three or four, it means that the producer or the manufacturer of that particular product will sell less quantity than what each used to sell. And that implies that his profit margin will also reduce because he cannot make enough sales as he used to perform. Eventually, when his profit margin reduces, he will not be able to function successfully as a business. He may have to reduce his sub strength. He may have to close down some of his equipment or machineries. And at the end of the day, if he is not taking, he may go bankrupt. Eventually, you discover that it is the business that suffers it because businesses are made to make profits. And when the consumers will not have the financial power to buy, there's nothing you can do. Business is complete when you produce at the end of the day, sell what you produce and get fund for it. That's the way it affects us in the business environment. And the factors I have rolled out earlier all comes down to business bonus because the consumer may have definitely some alternatives. But the business owner will not have any alternative. If I'm producing, for example, if I'm producing butter now and nobody is taking my butter, there's nothing I can do. But someone in their house soon will decide not to take butter and use some alternatives to eat his bread if he chooses to. And that's not possible for a business owner except he or she needs to diversify to other businesses, which we also need a lot of capital and other capacities to build around that business he wants to grow to. So by and large, the responsibility and the negative effect is more on the business owners. And that's why you can also see that statistics is showing that businesses are dying day by day because of the harsh economic environments. Okay. You mentioned some of these things and we discussed them before this segment where we have you. The same things that we mentioned by Nassima, the ones you mentioned, multiple taxation, power, infrastructure, forex, diesel, and you name it. But let's take taxation for instance. Government must collect tax. How do you want it collected? Do you want it scrapped or do you want it collected in different way? Describe to us what you feel government should do for you to be comfortable still doing business in Nigeria. Government all over the world depends on taxes to survive. So we are always in support of taxes. We're in the business community paying tax and we are happy paying tax. What we are not happy about is one multiple taxation whereby you pay tax, the particular tax to the federal government, you see the state government coming up with something similar. You see the local government coming up with also something similar. So you pay several taxes. So to interest you to note that some of the trucks you see on the road has about over 100 different taxes they're paying to be on the road. You can imagine that that's crazy in an environment where you want business to thrive. It's anti-business. Talking about taxes, we are expecting government to instead of raising taxes to increase those that will come to the tax net. We have still very few business owners paying taxes now. Government can generate more revenue by making sure that they expand the tax net. One way they can expand the tax net also is by collaborating more with business stakeholders. For example, in our own association, in our business community, we can assist governments to help them get taxes from our members instead of them going directly to businesses on the streets. By doing that, we'll be able to save the tax office a lot of fund in terms of logistics that they used to pursue that, and we'll be able to get also more taxes. And when the community is also seeing what government is doing, the taxes they've collected over time, you will discover that they'll be happier paying those taxes. Today, many of us are challenging the fact that we do not really see the effect of the enormous taxes the few of us are paying. And that means that it becomes discouraging for some of us to begin to pay tax. And then some of these taxes are even beyond our profits. We are expected to pay tax from whatever profits we make, but there are some taxes that are already statutory that it just must be whether you are in business and are making enough money or not. We expect governments to also apply more technology in their way of collecting taxes and managing tax issues. And then if this is done, we discover that governments will be able to get more taxes and the taxpayers will be more relieved and more encouraged to pay tax at the end of the exercise. Oh, well, you just mentioned that you could collect direct taxes from the association members and all that. How do you think that so many Nigerians will not run away from being part of the association in the first place? Just tell us the advantages of belonging to your situation, for instance, that you think that if this is one of the measures you will still have members that are ready to be there because someone who doesn't want to pay tax must find something really, really interesting to belong to your situation to come in there when he knows that he probably is going to pay the tax that he didn't want to pay. So what are disadvantages, by the way? Let's start from the tax issue. So there are some taxes that are statutory. There's nothing anybody can do about it. You cannot run away from paying it. So if you belong to an organized body like ours, and then we have an agreement with governments to collect tax on their behalf, we'll be able to give certain benefits. For example, if a particular tax that you are supposed to pay, maybe consumer tax, is expected to pay 10,000 lira per annum, for example, if government has to come to your dose, we can negotiate with government and say, okay, you don't need to engage staff to be going around the streets, collecting these taxes. We'll be able to collect it on your behalf. But for the fact that we're also doing this service for you, let our members pay a rebate of about 6,000, instead of 10,000. That will leave the business owner, and that seems a business owner some form that he can use to engage in his business for the activities. That's one way you have advantage being part of an association like ours. The benefit of belonging to an association is enormous. Governments also deal directly with associations rather than people on the streets, and that's how it should be, and that is how it is in other clients. So when you have opportunities coming from governments, you expect that they're going to get those opportunities directly from organized private sector associations, instead of the individual businesses on the streets. And that's why you see quite a number of business owners now, literally enough to understand that this is a time for them to join associations. You see an association already going with membership now. For example, in our association, the membership is free. You don't even need to pay to join us. It's totally free to join an association. And for this, we have quite a number of migrant business owners trooping in to be cloned to our association. We have over 50,000 members at the moment, and we are rendering to them business services that help them to build their capacity in business, give them further access to finance, access to market, help them to be able to influence government policies in a way that will positively affect our businesses, help them to be able to connect with the international community whereby they will be able to now sell their product of services to the international community in a seamless way and on and on like that. Oh, okay. That's good. Well, the business community, generally, it's like you said first when we started is not very clement. If you were to advise the present administration on things to do, not just the taxation, power, infrastructure, are there more things that need to be put in place, policies, specific policies that are lacking right now that are making the environment very hostile and harsh, as you said. Yes, now, if I have my way, I will first of all, work the government to pay critical attention to the MSME sector now more than ever before. We all have identified that it is the annual growth of the economy. We offer the highest number of employments in the country. We contribute as much as 50 percent of GDP. So it is a sector that can never be neglected if you want to grow the economy. So government should pay more than ever attention to that sector. I want to be where they can do that is by including the stakeholders in their policymaking. But often the problem we have is that there are always policies mismatch or policies of ourselves because the policy does not really lead to what is on the streets to the reality of the day. And this is because when policies are made, government sits in their office to make policies without involving these stakeholders. We won't go back this time around to begin to see how they can involve us from the incubation stage, not at the implementation stage. And when the policies are out on the main, there should be an evaluation and monitoring scene that will look at how the policy is doing on the streets. Is it at the expected result? Could there be second changes or modernities added to it over time? These are some of the things that needed to be done. We also discovered that some of the policies we have in the country that has to do with businesses, particular small businesses, are imported from other climes where their nature and culture does not value with ours. And for that reason, there are issues. It does not make its targeted results. So these are some of the areas we need to look at. Government also must see needs to make sure that access to finance is an important issue they need to address. Access to finance is very, very important. Many of the reason why small businesses are folding up is because of liquidity problems. There are no businesses now that can go to the bank to collect loans and cooperate with interest rates as high as 30%, 60%, 80% per annum. It's not possible. So government needs to intervene and make it possible. We have some more countries whereby if you are categorized as micro or small business, the way you are being treated is different from a regular large business. You are given a loan at single-digit interest rates that helps to grow your business to a point, we call it incubation period, until you cannot begin to say, okay, I have migrated from my small business to a medium on large business and cannot begin to do business in the formal way with the banks. These are some of the things we are expecting the government of the day to look at, especially now that they are coming to power. We also expect that the government of the day should see need to tackle the issue of this energy. Energy is important in business. While we all accept that, yes, subsidy needs to be removed, but we also see fixed electricity so that it will cushion the effect the subsidy may have on businesses. Electricity is available. Quite a number of small businesses or micro businesses will also continue to spring up and the existing one will be able to survive. Many small businesses depend solely on energy for them to operate. Even as micro businesses as a bargain and the rest of it, they depend solely on energy. So energy needs to be fixed as much as possible. So that businesses can survive. We also need a lot of capacity building that government needs to come in and see how the capacity of business owners demand. Managerial issues is one of the reasons why businesses are collapsing. And it is because many of the business owners these days are not trained to start a business, rather they start businesses out of necessity. And we should have a particular place where to train them. In association, we offer capacity building, but what we are doing is like a drop in the ocean. It is government responsibility to be able to build the business environment for it to be stable and grow so that many others will be able to come into business. You will now discover that many businesses or many Nigerians will no longer be interested in running away from Nigeria to other countries because they can start a business, sustain the business and grow the business. Thank you so much, Dr. Femi Bresola, National President Association of Small Business Owners of Nigeria for letting us see the business climate of Nigeria through the eyes of a business owner. We thank you so much for your time on the show this morning. Thank you very much once again. Okay, this is where we draw the curtain on today's program, the breakfast. And we do hope that you will join us again tomorrow for another edition. Whoever is in charge of whatever we've been talking about today, we hope that you are listening and you will do the needful. Stop comparing us to other countries. Ghana for instance, you don't need to buy fuel for your office, buy fuel for your car and buy fuel for your house. That is what Nigerians are doing. So if they're buying fuel, a litre for a thousand Naira, you know that you're only buying it for your car. So comparison sometimes is a mark of a lot of people will call it laziness. So we are unique. Nigerians are unique. The situation in Nigeria is unique. So if there's something that can be done by the government to alleviate the sufferings of the people, let it just be done. Because what we saw on the internet was a lot of things comparing the sale of petrol in other countries to that of Nigeria. To just say that in Nigeria is still cheap if it's sold at 500 Naira per litre. You didn't show us the minimum wage in those countries. You didn't show us the power, the state of power in those countries and all that. So you should, leaders should stop doing these things. Just treat us, give us what we need because we need them. Not because we are like another country or anything. We are just Nigeria. And if we are Nigeria, treat us as Nigerians and find solutions to our problems in Nigeria and not tell us how it is done everywhere else. Because when the citizens begin to compare the government to the governments of other nations, it will not be fair. So let's just be balanced. Know that we are in Nigeria and let our problems be solved as Nigerians and for Nigerians. But before we leave you, remember the words of Winston Churchill, which Winston Churchill said, success is not final. Failure is not fatal. It is the courage to continue that counts. Success is not final. Failure is not fatal. It is the courage to continue that counts. That's how it's going to be on the show this morning. My name is Nyam Gul Aghaji. Let's do it again tomorrow.