 Welcome back, it's time for a first hot topic. President Borla Tnubu's tax regime is set to take off as inaugurates a committee on fiscal policy and tax reform to be headed by Taiwo Onyadili. Multiple taxation have over the years stifled business growth with the organized private sector asking for review of unfriendly fiscal policies of the past administration. Nigeria ranks low on the global ease of paying taxes while the country's tax-to-GDP ratio is one of the lowest in the world and below the African average. We're going to take a look at this right now and I've been joined by Frank Eliania, Technology and Media News Editor, Business Day newspaper. Good morning to you, Frank. Good morning. Happy to be on the show this morning. Glad to have you join us. Mr. Frank, it's 57 days in the life of this administration. Let's start with the level of faith you have in the direction of the economic plans of this administration so far revealed. Yes, so there's a bit of optimism in the market about the president's policies so far. It has been swift and it has been back to back and coming. So therefore, a lot of people have expressed optimism that maybe the economy might soon be on its path to growth. Also, the recent appointment of Taiwo Yedale from PWC to head the task committee of the presidency and have also sounded a positive note, if you like, with the market. So it looks as if there's a lot of movement happening. The only challenge is that that movement seemed not to be translating down to the man on the street. Every other person out there don't feel like anything is happening but it boils down to impact of the policies, how far reaching. So I think we have to give it time to see what happens but there's a lot of optimism and we expect that this might translate to the general well-being of the citizen. So this committee have said that they do not seek to impose new taxes but they are concerned with improving on collection and compliance management. However, public perception is key in them being able to achieve whatever they're seeking to achieve and indeed there is need for them to be swift and very effective as you have said. But also you have the FIRS plans to introduce VAT for the informal sector. So put this side-by-side. How is it going to work? Correct. How is that going to work? I think there needs to be a lot more clarity with the communication of the government or there needs to be an alignment, so to speak. You can't be saying something on the other side and then the other side of you is doing something else and that's why on this show we've always, I've always said, there needs to be a perception that the president is walking the talk. Sometimes his policymakers are saying something else. He is saying another thing. But I don't think anybody in the market, whether you're an investor, whether you're a business person, will think that this government has any plan to reduce taxation or maybe make businesses pay less or something. I think the direction that we have seen so far with the government is revenue generation. They want to increase the amount of money that Nigeria has, which is why one of the first policies that he looked at was the fiscal policy measures where he removed some taxes and also approved others and all that, that fiscal policy measure should be implemented swiftly. So that gives you a sense that this government is after increasing the revenue and there is a sense to that or it is something that should be done. We should increase our revenue, but then the question is always at the expense of what and also when you're increasing revenue, what is in it for the business community was in it for the consumers who are going to be assessing these services and products that these businesses are coming out with. So there has to be an alignment again, I repeat, between what the government says and what it brings out there. So I think that sometimes the government looks at the wrong picture. For instance, if you're looking at the banking sector and some of the profits that they have been reporting, I think it was this morning business they reported that the UBA has increased its profits. If you look at it from the financial sector, you will think that this economy is making a lot of progress or something is happening that is positive with the economy. But then you look at also the manufacturing sector or the FMCG sector, that's where you see the real picture of what some of these policies have done to the revenue of many companies. For instance, Union Lever just reported the other day that it lost about 72% of its profit. And its operational cost has increased significantly. Where it was aiming, say, about 200 million as profit, the operational cost has increased to 3.2 billion naira. And for me that is massive and that gives us a better picture of how some of these policies have affected the sectors that help us make production happen. Indeed, the organized private sector are struggling to stay afloat. And as you have rightly alluded, Nigerians are overwhelmed, presently overwhelmed. We saw the protest and been in city yesterday. And there is no doubt that this government has its work cut out for it. In signaling its intentions in building this economy and providing making job opportunities available. So whatever this team being set up has to do, as I said earlier, they need to be very swift and very effective about it. How swift do you think they should be? Okay, so they need to, the swiftness should have started a long time ago if you ask me. But then I worry that no matter how much good intentions the people that are being employed to do some of these things have, their speed will only be determined by the speed of the man at the center of it all. If the president is not running as fast as he should, looking at the current state of the economy, those who he has employed to help him to run alongside him will not be able to run as fast because he will be dragging them backward. Look at the fact that it's over 50 days and we don't have the ministerial lists yet to go to the National Assembly. We don't know the make of the people. We don't know who they are. We don't know what vision that they are coming with. We don't know what direction that they will want to take us to. That for me is a concern, in fact a very real concern. Because I was thinking by now, we should have a minister of petroleum, a minister of education, a minister of a Greek and other ministries. So it should have happened a long time ago and I've argued in the past that the latest that I expect a government or a president that wants to work to release ministerial lists is a month into office. You don't have any business waiting beyond that. You don't because already you have spent about three months before you were sworn in to know who it is that's going to be your ministers. The governors that you were waiting upon have already been sworn in. So they already have their own list of people that they want to bring to you and you have to vet it, you have to ask questions or go back and forth with them. But by now we should have seen the ministerial list. And I'm also very, very disappointed that the focus appears to be on revenue. The focus appears to be on how to boost oil sector and all that. But we are not doing much about human development sector. The education sector has no plan yet as to where the government wants to be except the increase in school fees that we heard during that time and all that. I think that's not even what the focus should be at this moment. You're not thinking about increasing school fees. No matter what the argument is that this school should end better so that they will increase their infrastructure and all of that. No. What you should be thinking about first of all is what reforms should we bring to the education sector and that should have led to the speed of bringing out the person who will lead the education sector. So by now we should be thinking about how do we reposition our young people because that is where the asset is. It's not in the oil. Oil will be there. But if you grow your people, look at what we're talking about now. We're talking about Jack Barr. We are talking about people who are living the country and many of them don't have any hope of coming back or even contributing into the economy. But imagine that we were intentional about growing our people. We were intentional about their welfare, their education. Even if they leave the country, many of them will want to come back because they know that there is something being built up for them. But right now we don't have a direction in the education sector. We don't have a vision for it. And so for me that's a very big minus for the government already. So the speed, talking about the speed again, will only be determined by the direction the president goes. It's not about who he employs. He employs a first class graduate from Harvard. But if he does not move at the speed of that first class graduate, nothing changes until that happens. Constitutionally it has 60 days to give us the list of ministers to let us know those that are going to work with him. And today, as I started, 57 days. So he has three more days to go. Why do you think he's been this slow? One, those who voted for him had said that, oh well, the kind of things he did in Lagos and being an economist himself, that he would hit the ground running. Do you see, have you been able to pinpoint the reasons why it's taken president Tnubu this long to show us his team? Okay, so talking about what he did in Lagos, did you still out on that? Because for me, I think the only thing he did in Lagos was about just raising revenue and taxing and taxing and taxing. I don't see any significant infrastructure that's happened there. But did you still out on that? But looking at what is holding him back, I think it's just mere politics. I think it's politics and I think it also speaks to the fact that perhaps he wasn't so prepared coming to office because it looks to me like he was more entuned with the politics all he did was trying to get himself there by any means necessary. So he got himself in there. So whatever happens, it just happens. So he's just running along with the crews. The tide is coming so it's now time to do ministerial appointments so he needs to do that. I also heard people who said that the delay for ministers was also delaying the appointment of commissioners in Lagos. I don't know how true that is, but if that is the case, then him delaying the ministerial list is also affecting governance in other places. So what I think is that whatever his reasons are, this is not even the time to even play politics right now. We have said before that what is needed are people with the mind to work, people who are ready to roll up their sleeves, people who know that there's an urgency, that there is a crisis, in fact a deep crisis in the country. People are suffering and it is a real suffering. It's not just something and given the fact also that right now we know that there is no refinery that is ready to refine any crew at this point, then it becomes more urgent for him to start thinking seriously about who is going to head the ministries. You know, I heard yesterday has been shifted to 2025. I don't know how true that is. And then of course the three refineries that the government, the past administration said they were trying to complete by March 2023, March has come and gone. Maybe the gold post has also shifted to another year, another we don't know about that. But if we don't get crude into the market, the price of crude will continue to go high and that's also how the price of products in the market will also continue to go high. So there needs to be a cushioning for people who are bearing the brunt of all these hash policies that the government is reeling out day by day. And what that requires is somebody at the helm of affairs to work the talk. We have said before it is important for him to show us that he is also making the same sacrifices. He is not making it at this time. We are not seeing that sacrifice. We are not seeing the cut cutting and cut cutting goes beyond just saying let us merge some ministries because you can merge ministries and still create a lot of portfolios for people to come and reap benefits from. If you are merging ministries, what you should be thinking about is how do you then reduce the personnel cost from merging. So that is what we are expecting. And then we are also expecting a review of the salaries of those who govern us. The lawmakers, the ministers, the president himself, we need to have an account. Let us know exactly what you are earning. And I have also been asking myself why is it that the president has not declared his assets? We need to know how much he got into office with and how much he has currently so that we know how much he is going to live with. These things are clear. So if you want to lead this economy to the part of growth you have to be transparent about it and then you have to be accountable and make people who hold you to account. All right. Well, these reforms that this committee, as I said, they've got their work cut out for them. The four executive orders that were signed recently that have been uploaded are temporary. Temporary. The organized private sector have been under heavy burden of multiple taxation. Local manufacturers are crying to the heavens. What would you say is the best way to encourage local production, increase internally generated revenue and push the economy forward in addition to this committee that has been set up? Okay, so the first thing that should have been done is looking at the transportation. Let's start with transportation because I don't want to start with electricity because there's a lot hanging in there. So you may not be able to unlock it immediately but look at transportation, for instance. Can we provide a means of transportation for people or for businesses that helps them take their products from one end to another because right now what appears to be one of the biggest costs for businesses now is transportation because the removal of petrol subsidy lends itself directly to hike in transportation. And that takes me back to the auto gas fund that the past administration wanted to start in 2020. That fund essentially says that the government plans to convert about a million vehicles, a million vehicles that includes buses, that includes different other vehicles, most of transport, to become gas-driven. So what that means is that they are also renewable, they are clean, but then it reduces our dependency on fossil fuels. And when that happens it means that the costs that businesses are having to bear right now reduces. So the plan was that by 2021 we would have had at least 500,000 vehicles converted till today that you and I are talking that plan has yet to be implemented and what are the issues? The issues is that the process to assess the fund, the process to assess the fund, the fund is about, I think about 250 billion Naira fund, the process to assess that fund is very tedious and also the CBN has not helped matters because of all the documentation that they require for businesses to submit, manufacturers to submit before they assess the fund. So first of all, go out of the CBN and ask them what is holding back this policy? Can we roll it out in the next few weeks? This is like a low-hanging fruit. You can start converting immediately. If you can convert about 10,000 in every city and deploy it, you would have done a lot significantly to reducing the cost of transportation for both people and for the goods and services that will be carried on these vehicles. So it is time to look at what are the things that you can do quickly and do them immediately and then face electricity as well. What are we going to do about our electricity? We need to increase the capacity. If we need to increase the capacity, let us increase the capacity. If we need to galvanize some of the governors to start investing in the electricity sector, let's do something. There needs to be some urgency towards energy generation. We need to start doing that. But first of all, start to transportation, reduce the cost of carrying goods from one place to another. Then you look at electricity. All of that can go side by side. Nothing states that you must first of all finish one before you go to the other one. But if our focus is first of all how to make tax, generate tax, how to do other work and all that, we are not looking at the right focus. Because look at people like Unilava that has lost significantly their revenue. How much incentive do they have to pay tax for the next quarter? This is just a half-year result that they have and they've lost so much. So how many more businesses are in their shoes and how many more businesses will want to pay the tax that you are organizing for? So the first thing to do is how do you ginger production, how do you make people productive again? And transportation is a big thing to do right now. Then you do electricity. Then you can take it off from there. There are other things to do. Human, they had DI needs to be done so we need to do something about it. All of that are things that government can look at at the interim, what they do, all they do to bring out the ministers that we've been waiting for. Thank you so much, Frank, for your time on the breakfast as we discussed this matter this morning. Thank you so much for your time, Frank. Frank Eliana, Technology and Media, News Editor, Business Day has joined me to take a look at our very first hot topic. We'll take a break and come back for our second hot topic. Just stay with us.