strategies for enhancing private sector productivity in lagos state

STRATEGIES FOR ENHANCINGPRIVATE SECTOR PRODUCTIVITY

IN LAGOS STATE

THE LAGOS CHAMBER OF COMMERCE AND INDUSTRY

Submited by LCCI to His Excellency, Governor Akinwunmi Ambode, FCA

July, 2015

1. EXECUTIVE PAGE 3

2. QUICK BACKGROUND 4

2.2 Issues/Challenges in Lagos State 5

2.3 Opportunities in Lagos State 6

3. RECOMMENDATIONS FOR BOOSTING THE PRIVATE

SECTOR IN LAGOS 7

3.1 Enhancing Security 7

3.2 Infrastructure Building and Maintenance 7

3.2.1 Power 7

2.2.2 Transportation 8

3.2.3 Enhancing ICT 10

3.4.1 Governance, Enforcement and Performance Management 12

3.4.2 Bureaucratic Bottlenecks 13

3.4.3 Overlap and Operations of Regulatory and Monitoring Agencies 14

3.4.4 Transparency & Accountability 15

3.5 Environment 15

3.6 Skill and Manpower 16

3.7 Taxation, Multiple Taxation 16

3.7.1 Other Essential Considerations for Addressing Tax

Issues in Lagos State 17

3.8 Access to Fund 18

3.9 Boosting the SMEs 19

3.10 Access to Land 20

4.0 RECOMENDATIONS REQUIRING LEGISLATIONS 21

5.0 FINAL NOTES 22

5.1 Broad Economic Plan of the New Administration 22

5.2 International Conference and Exhibition Centre 22

5.3 Lagos Corporate Assembly 22

5.4 More Collaboration between LCCI and Lagos State 22

ABOUT LCCI 23

Contents

THE LAGOS CHAMBER OF COMMERCE AND INDUSTRY(2)-

STRATEGIES FOR ENHANCING THE PRIVATE SECTOR AND PRODUCTIVITY IN LAGOS STATE

The Governor of Lagos State, His Excellency, Governor Akinwunmi Ambode, FCA has expressed his desire to trigger a new wave of prosperity in the state through the private sector. This

request has provided opportunity for the corporate community operating in Lagos State across all sectors to articulate, harmonise and present its perspectives to the Governor. We key into the aspiration of the new administration in Lagos State to promote and protect the private sector.

Many businesses especially the manufacturers are increasingly relocating out of Lagos State to Ogun State due to the harsh and costly operating environment in Lagos over the last few years. The impact of the ongoing industrial migration out of Lagos State will be felt in the tax revenue of the state over the next few years.

Thus, this strategyreportfor boosting private sector led productivity in Lagos State is in fulfillment of LCCI’s mandate as the leading voice of the private sector in Nigeria (since 1888), with Lagos State accounting for over 60% of industrial output in the country and LCCI with 1,750 corporate members.

We strongly believe that an efficient private sector in Lagos State is crucial to not just to Lagos State Government but the country in general. Industrial activities will grow by not less than 25 % annually in Lagos State given a more service oriented governance and regulatory environment if supported by basic

infrastructure (power, logistics and transportation). This will impact directly on new job numbers, emergence of small scale industrial and agricultural processing ventures; higher tax revenue for government at all levels and ultimately douses the growing insecurity fuelled by youth unemployment.

EXECUTIVE PAGE

His Excellency, Akinwunmi Ambode, FCA

Lagos State Governor

Alhaji Remi Bello/ FCAPresident, The Lagos Chamber of

Commerce & Industry

THE LAGOS CHAMBER OF COMMERCE AND INDUSTRY -(3)


QUICK BACKGROUND

• Lagosaccountsfor60%ofNigeria’sindustrialinvestments,foreigntradeandcommercialactivities;

• Approximately40%ofalllabouremolumentspaidinNigeria• Population – 21 Million • Density-13,405KG/M3• 9thmostpopulatedcityintheworld• GDPis$150bnperannum(30%ofcountrytotalin2013)• LagosisthecommercialhubofNigeriaandWestAfrica• Hostthelargestseaandairports• FormerpoliticalcapitalofNigeria• VisionistobeAfrica’sModelMegacityandGlobalEconomicandFinancialHubthatisSafe,

Secure, Functional and Productive• TheMissionofLagosStateis“PovertyEradicationandSustainableEconomicGrowththrough

Infrastructure Renewal and Development”.

LCCI recognizes the fact that some issues are outside the purview of Lagos State but within the jurisdiction of the Federal Government, like the activities at the Border posts both on land, sea and air. Nevertheless, we believe Lagos State should be able to influence and persuade Federal Authorities within her territories.



The overall aim of Lagos Government is to “…provide a conducive environment for

business…”

Transportion Crisis

2.2 ISSUES/CHALLENGES IN LAGOS STATE

Lagos presents a mix of challenges and opportunities for the business community, productivity and wellbeing. Some of the cross-cutting challenges to business and private sector across all the sectors operating in Lagosinclude:

• InfrastructureShortcoming(mostlyenergyandpower)

• SecurityLapses• Poorpublictransportationsystemandtrafficgridlock• Landandhousing• GovernanceandRegulatoryburdens• Environment,SanitationandWastemanagement• HighurbanmigrationandSlums• Fundingandtaxissues• Skillgapsandlackofadequatemanpower• Lagosistheonlyknownmegacitywithnoconference

and exhibition centre.

ISSUES/CHALLENGES IN LAGOS STATE

We firmly believe that Lagos creates unique opportunities for the private sector and a wide range of investment potentials. These opportunities will unfold if the public and private sector collaborate on the issues articulated in the following sub-sections:

2.3 OPPORTUNITIES IN LAGOS STATE

The Lagos City presents opportunities for wide range of investors across all the sectors:

• Infrastructurebuildingandmaintenance–throughPPPs

• Clean-up,reconstructionandexpansions• Commerceandtrade• Housingandrealestate• Provisionofwiderageofbusinessservices• Hospitalityandtourism• Exportzones,exhibitionsandconferencecentres• Skills,technologyandmanpowerhub



OPPORTUNITIES IN LAGOS STATE RIDING ON PPPS

PPP on Infrastructure Building



PPP on Transportion Management

PPP on Waste Management

RECOMMENDATIONS FOR BOOSTING THE PRIVATE SECTOR IN LAGOS

3.1 ENHANCING SECURITY

The insecurity of lives and property in Lagos State is disturbing with grave implications on the confidence of potential investors, sustainability of existing businesses and the overall cost of doing business. Businesses only thrive in a peaceful economy and Lagos state must strive to keep the state safe at all times

Recommendations and Responsibility

• Empowering the security agencies (i.e, Police) • Expand the size of Security Trust Fund (STF) in the state and

publish how the fund is administered on periodic basis • Develop and implement framework for community policing• Implement“KnowyourNeighbor”campaignandsustainthe

ongoing Resident Registration Scheme• Strengthening and sustaining the momentum of the ongoing war

on armed robbery and kidnapping in the state• Protection of strategic government infrastructure (i.e, pipelines

and critical installations/facilities)• Boosting security along waterways and water fronts. Let the

installed CCTVs in the state function effectively.

3.2 INFRASTRUCTURE BUILDING AND MAINTENANCE

Inadequate infrastructure (power, transportation - rail, road, ICT etc) increases operating cost, reduces competitiveness and affects the survival of businesses in Lagos State. There is need to prioritize government expenditure and develop external collaborations to boost investments in critical infrastructure. This can be enhanced through Public Private Partnership (PPP), concession and privatization.

3.2.1 POWER

The power situation is still a major problem for business across all sectors. Expenditure on diesel and other fuels are on the high side and continue to rise. Productivity and sustainability of many companies have been adversely affected by the continued crisis in the power sector.


• Lagos State to come up with its framework and support for private sector led captive power generation

• Discos operating in Lagos State have indicated interest to purchase (offtake) electricity or spare capacity generated from any cluster

• Lagos State should do more in protecting power and electricity infrastructure within the state.



2.2.2 TRANSPORTATION

Challenges associated with the movement of people and delivery/logistics of goods and services from one point to the other within Lagos State or into/out of Lagos have emerged as one of the major factors stifling businesses. LCCI transport and logistics survey conducted in 2014 showed that 25% of annual profit of industrial operators in Lagos State is lost to the clumsy transportation system in the state.

These challenges include road network, non-existence of cargo train within the poor and inefficient rail system, cost and infractionsassociated with government agencies operating on Lagos roads and undeveloped water transportation. Many businesses especially the manufacturers are increasingly relocating out of Lagos State to Ogun State due to the harsh and costly operating environment in Lagos State over the last few years. The impact of the ongoing industrial migration out of Lagos State will be felt in the tax revenue of the state over the next few years. The key issues and actions for the new administration are:

• World Bank estimate shows that N180 billion is lost by workers and private sector due to traffic on Lagos roads in 2013

• Lagos is ranked the worst traffic city in the world in 2014 by Global City Watch International.• The Apapa port area in Lagos has been described as the highest revenue earner of the

Nigerian Government after the oil producing areas of the Niger Delta. Yet accessibility to the area has become very difficult, Apapa has been neglected and has become a tough place to do business.

• Pot holes and large cracks are predominant on major roads in Lagos hindering movement of goods and services

• Many inner roads in Lagos State are in bad and impassable state causing loss of life and properties on daily basis

• Water transportation in Lagos is yet to peak due to structural, safety and governance shortcomings.

• Investors (local and foreign) are gearing to commit their investment in the Lagos State water transportation sector once they get the right signals from the government.




• Transportation is arguably the biggest business activity in Lagos hence

the PPP model of BRT has to be expanded

• The capacity and horizon of private partners in the BRT will not take road

transportation to the desired level

• Embark on effective and ongoing road repair using a dedicated team

and intelligence. This can be contracted to a private sector firm

• Encourage the use of pedestrian bridges which Lagos State has

invested so much but not being put into effective use. This can be

done immediately by the introduction of concrete road barriers on the

median of the roads around the pedestrian bridges, this will deter road

users from crossing the roads and the slow movement that is normally

experienced will be totally eliminated

• Lagos State Government should invest in building packs for trailer and

fuel tankers in Apapa and charge a commensurate fees for packing to

recover the investment. This will help reduce traffic congestion on the

Apapa corridor of the state

• The 4th Mainland bridge construction project should return to the

table. Same with the construction/expansion and possible tolling of the

Murtala Muhammed International Airport Road. Federal Government

approval and compromises for these projects should be easier now that

APC is the Government at the centre

• Develop other means of transportation – water and rail to decongest the

roads through intermodal transport framework

• The water ways as it is now is dirty and filthy. Lagos State should use

the private sector to clear and clean up the water ways from time to

time, provide security and fuelling on the water ways. All these can be

conceded to the private sector including building and management of

jetties

• Complete the ongoing metro rail and make it operational

• Extend the metro rail line up to Lekki and the new Free Trade Zone.



3.2.3 ENHANCING ICT

In addition to the ICT strategy of the administration presented in the party’s manifesto, we recommend thatstate governments should remove/relax all the regulatory and fiscal impediments constraining the right of way, rollout of fibre optics network and ICT cable and connectivity.

3.3 LOGISTICS ISSUES IN LAGOS STATE

Challenges associated with the delivery of goods and services from one point to the other within Lagos State have emerged as one of the major factors stifling businesses. Beyond the perennial and hectic traffic situation in Lagos State, the inhibitive activities of government agencies (FG and States) on the nation’s roads has made distribution of goods and services by the private sector unbearable.

Agencies/groups whose activities have become most burdensome to businesses, logistics and delivery of goods within Lagos State are: LASTMA, Federal Road Safety Corps, VIO, Police and the Local Government Agents. There are issues of compelling delivery trucks to Purchase numerous stickers, emblems and permits from both State and Local Government. Demand of bribe by the police, multiplicity of levy from State and Local Government agents, demand for frivolous documents by Road Safety officials and the Police, gross overlap of duties among LASTMA, FRSC and VIO Officials, arbitrary“one-way”designationofcertainroads.Alloftheseimpedimentsresultindeliberateharassment, extortions, intimidation, delays/waste of time, illegal charges, fines, outright destruction or seizure of the goods from businesses by officials of the agencies.

Source: LCCI Research, 2014




Most manufacturers/businesses now opt to transport their goods at night or while it is raining whilst some pay huge illegal amount of money to officials of these agencies on different routes in Lagos to enable them have a smooth pass. The effect of increasing logistics challenges on our roads is the significant drop of number of truck trips and throughput, drastic drop in sales affecting turnover of businesses, outright loss of business since they could no longer meet up with client’s demand while some even lost their lives through accidents during night trips.





• Beef up Security and lightning of all roads and street to support the Government directive for heavy trucks movement in the night

• Ban army and other security officials from illegally engaging as escort (on private arrangement for delivery vans)

• Strict supervision, monitoring and innovative feedback mechanism on the operations of the road traffic related agencies operating in Lagos

• Conduct regular orientation and re-orientation programs for all the agencies on best practices and service codes

• Effective communication and awareness of any official fee to the public/operators

• There should be a central Tariff/Stickers issuance system covering all the local governments

• Harmonize the overlapping functions/roles of the agencies on Lagos Roads

• Local government should be banned from mounting road blocks because they are not security personnel and has no statutory power to do so

• Ensure that the agencies desist from duplication of multiple permits, charges and fees

• Parking permit should be handled by one arm of the government to avoid duplication of levies

3.4 GOVERNANCE, REGULATION/MONITORING AND TRANSPARENCY

3.4.1 GOVERNANCE, ENFORCEMENT AND PERFORMANCE MANAGEMENT

Multiplicity of government interface in Lagos State create complexity and delays, e.g., long contract approval period of 2-3 years (2-4 times longer than in most states in the country). This results in slow project development and increase costs for contracts and contractors. Performance management, coordination and tracking among ministries and agencies in Lagos State are still less than desired. This results to duplication of roles among government agencies in Lagos and higher cost of governance. Enforcement is weak as well but appears drastic on few culprits on private sector operators.




• Establish central performance tracking and management unit of all the ministries and agencies within the Governor’s office

• Performance Tracking and Management Unit should be in charge of setting targets and tracking performance in the State among the MDAs

• Periodic evaluation and performance review by the governor with all heads of MDAs

• Involve LCCI in the annual Lagos State Economic Summit.

3.4.2 BUREAUCRATIC BOTTLENECKS

Government agencies and key institutions in Lagos State continue to be riddled with red tape and bureaucracy, resulting in a complex web of unclear and frequently-changing regulations, policies and enforcement. Such an environment not only makes it difficult for entrepreneurs to do business, but also allows for arbitrary and inconsistent enforcement of laws and regulations by government agencies. Red tape associated with Regulations and government bodies cause inefficiencies and drive up costs.


• Harmonize/consolidate or streamline regulatory and monitoring institutions with significant overlapping functions/responsibilities

• Ensure proper coordination between government bodies in order to set clear regulatory boundaries to eliminate overlap between agencies and streamline fees and levies affecting the industry

• Adequate funding and performance audit of regulatory and monitoring institutions to reduce impunity and their dependence on the private sector for funding with the attendant infractions

• Establishment of an apex monitoring agency in Lagos State to oversee the activities of other agencies. This will potentially help to address the overbearing excesses of the agencies

• Ensure transparency and a level playing field for all investors across all sectors operating in Lagos state.



3.4.3 OVERLAP AND OPERATIONS OF REGULATORY AND MONITORING AGENCIES

The burden of regulatory overlap among Lagos state agencies and sometimes with the Federal regulatory agencies is a constraint to businesses through increased operational costs and waste of time. For instance, overlap between National Environmental Standard and Regulatory Enforcement Agency (NESREA) and the Lagos State Environmental Protection Agency (LASEPA), LASSA and Ministry of Environment on the private sector has become unbearable and a major disincentive to investment. The Lagos Chamber is daily inundated with reports of the adverse effects of the activities of these agencies on business. All sorts of charges and fees are imposed by the two agencies respectively. Such fees include environmental development charge, chemical storage permit, laboratory analysis, submission fees for environmental assessment, submission fees for environmental audit report. Companies are being compelled to use the associates of NESREA and LASEPA officials for the assessment/ audit report at ridiculous prices. The recurring issues border on the following:

• Extortion by the officers of the agencies arising from excessive documentation, intimidation, inspections and related physical bottlenecks.

• Closure of factories without cogent reasons.• High frequency of factory inspections with attendant official and unofficial charges and

seldom waste of management time.• Large range of duplicated and overlaps in the functions of NESREA, LASEPA LASSA and

Lagos State Ministry of the Environment.


• There is need to build a framework that will eliminate duplication of regulatory functions and enhance the collaboration between NESREA and LASEPA

• NESREA should henceforth rely on the certifications given by LASEPA to companies operating in Lagos on all environmental issues

• We want to see a clear pronouncement specifying the number of times and for what purposes NESREA and LASEPA are expected to visit the companies in a year

• We request for the official list of NESREA and LASEPA’s environmental/sanitation requirement and the accompanying fees/charges. This will help companies to adequate put things in place as required and avoid the accesses of the agency officials during factory inspections

• Lagos state Government should work with Federal Government to redefine the roles of the two agencies with a view to stop the ongoing regulatory duplication and overlapping functions

• On the immediate, government should adequately fund the agencies and provide them with the necessary working facilities because the current poor funding levels of the agencies serves as a compelling ground for them to extort money from the companies.



3.4.4 TRANSPARENCY & ACCOUNTABILITY


• Increase transparency on revenue collection and remittance to the Lagos State Government account

• Implement the Treasury Single Account policy for the state. Ensure that no revenue generating agency of the government has spending autonomy. Strengthen all enforcement and transparency agencies of the government

• Review the activities of Lagos state Tax consultants relating to the moral standing of the officials

• Consider a new and more innovative ways of collecting and enforcing tax revenues in the state.

• Invest in other revenue generating ventures through PPP model.

3.5 ENVIRONMENT

Most parts in Lagos state are lying about 4cm below the sea level with high level of human and industrial activities. This makes the city prone to natural disasters. Again, the volume of waste generated in Lagos state is a case that calls for review of the current waste management scheme of the state.


• Clean up the water ways to open opportunities for marine transport

• Update the Lagos Master Plan. The current one may be out of date

• Encourage Green House power sources • Reclamations and slums development should be implemented

concurrently to mitigate possibilities of natural disasters• Open up water channels, canals and the water planes• The Amsterdam, Netherland model of water and

environmental management scheme is best suited for Lagos State

• Waste to power management model (i.e, bio-mass technology) through PPP model.



3.6 SKILLS AND MANPOWER

One of the critical challenges affecting the growth and sustainability of the private sector is the shortage of required skill in the Nigerian Labour market. The NESG Summit Report, 2013 recognised this as a soft but far reaching challenge across all the critical industries in Lagos and Nigeria at large. The implication of this is increased cost of hiring skilled labour and sometimes importation of skilled technical workers from abroad with all the attendant costs.


• Entrepreneurial Education: Retool post-secondary curriculums towardsentrepreneurshipstudies,“hands-on”skilltrainingatschools

• Introduce work and school model, and roll out more industry incubation centers

• Deepen and expand Industrial mentorship programs (e.g. the LCCI mentoring program has been very successful but it needs to be boosted from its current level of operation to a bigger industry mentorship centre

• Private sector to compliment the government by establishingindustrial mentorship programmes and operated by industry technical schools (ie, oil and gas, IT Telecoms, Machines, quality, safety and standards technical schools)

• Develop framework to organize the lower-scale skilled artisans in the state.

3.7 TAxATION, MULTIPLE TAxATION

Businesses in Lagos are increasingly conerned by the multiple taxation, arbitrary fees and fines from agencies of government (State, LG and FG) operating in Lagos. This has a profound adverse impact on their operations. DFID-led report by Enhancing Nigerian Advocacy for a Better Business Environment (ENABLE)focused on the impact of multiple taxation on the business environment in Lagos. The Law on Approved Levies for Local Government Councils and Local Council Development Areas passed by the Lagos State Government in July, 2010 highlights the following:

• 83% of businesses in Lagos State confirmed that ‘multiple taxation’ remains even after the Law approving levies and taxes for LGAs in Lagos

• Four in five businesses stated that there is corruption and moral issues in the workings of Lagos State Tax consultants.

• PAYE computation and allowances are not in tune with current realities of cost of living leading to compliance issues and sharp practices.

• Businesses in Lagos pay more taxes by 8 times more than businesses located in other states



• Nearly two-thirds (67%) of the businesses in Lagos State complained that double taxation, fees, levies and charges caused significant rise in their cost of doing business in Lagos over the last few years.


• Improved transparency, reports and communication about the use of tax revenue in the State will boost tax payers’ confidence and trust

• Disciplined and prudent behavior of government functionaries in the state is very important

• Review the engagement and operations of Lagos State Tax consultants and move towards finding a more innovative model to collect and enforce taxes in the State

• PAYE computation for all expatriates in companies should follow same standard. Stop discretionary PAYE computation for firms that have expatriates in their employment

• Residual problems of tax touts should be tackled as it appears the problem has not completely disappeared

• Tax administration in the informal sector may benefit from the use of trade and market unions in the collection of taxes and improvement of awareness among informal sector businesses.

3.7.1 OTHER ESSENTIAL CONSIDERATIONS FOR ADDRESSING TAx ISSUES IN LAGOS STATE

Accountability is still unclear to citizens and business owners concerning the use of tax revenue and public funds. Citizens need to know how their taxes are used to serve public needs and how they stand to benefit from paying taxes. Businesses’ perception of tax as a burden may be as a result of the feeling that they do not benefit meaningfully from the taxes they pay. Improving accountability in this regard is important in gaining cooperation and compliance of the tax-paying community.

Residual problems of tax touts should be tackled as it appears the problem has not completely disappeared. More publicity should be given to citizens’ rights so as to protect them from extortions. Identification tags should be used by tax agents as prescribed by law for easy identification and clarity. There is still a concern of land use charges levied by traditional land owners (omo-onile) when landed property transactions are made. This needs to be addressed because it constitutes a tax (illegal) burden for citizens.

Tax administration in the informal sector may benefit from the use of trade and market unions in



the collection of taxes and improvement of awareness among informal sector businesses. It is interesting to note that membership in unions is compulsory before one can be allowed to put up a stall in the markets or participate in informal sector businesses. For this, the unions can provide the umbrella through which taxes can be efficiently collected and better tax awareness created among the informal business sector.

Joint Tax Board:The issue of multiple taxation between the Federal, States and Local levels of government still needs to be addressed. The tax jurisdiction at the various level is not yet very clear and there are still conflicting issues.

Derivation criteria from FG: Tax Income, VAT and import /excise duty are currently not covered within the country’s derivation criteria of the Federation’s revenue formula. This has led to a massive denial of revenues to Lagos from the Federation account. The current administration should devise strategies to push for a broader definition of the Derivation element from the FG.

3.8 ACCESS TO FUND

Many small and medium scale enterprises have serious difficulties in accessing credit even at the prevailing high rates. Feedback from business operators, especially the medium to small size firms across all the sectors confirmed that access to credit and high cost of fund were some of the most challenging issues. Over the last few years, the monetary authorities (CBN) have pursued a tight monetary policy resulting in interest rate going as high as 25-35%. High interest rate has adverse implication on production, employment and growth. Many are frightened to take loans because of the high interest rate. The tight credit situation is a major inhibiting factor to the capacity of domestic enterprises to take advantage of the robust market in Lagos State.

Unlocking the Nigerian credit market at this time is critical to stem the gradual crowding out of domestic entrepreneurs by foreign investors. The current tightening of monetary policy is inhibiting domestic production and encouraging imports.


• Open up new funding sources at the State level and ensure that guidelines for accessing intervention funds are reviewed and made less stringent

• Registration of All SMEs operating in the state and reach them through NASMI and LCCI

• We reiterate our call to both fiscal and monetary authorities to work together to ease the credit conditions, especially for the SMEs

• Rollout new intervention funds for SMEs to address the working capital issues with a more flexible collateral conditions.



3.9 BOOSTING THE SMES

Nigerian Bureau of Statistics reported that 17.2 million SMEs exist in the country. Approximately 40% of the 17.2 million SMEs in Nigeria operate in Lagos State. Most of the SMEs are performing far below their potentials. We believe SMEs are the most viable platform for realizing the job creation aspiration of the new administration given a conscious and successful intervention in the sector.

The industrial sector and SMEs are critical to national economic development especially in the area of job creation and poverty alleviation. Since government cannot generate the quantum of jobs needed to gainfully engage the teeming unemployed youths, the private sector and especially the SMEs should be empowered and supported.


• Improve the scope and depth of financial and regulatory intermediation for the benefit of all SMEs in Lagos State irrespective of the sector where they operate

• Open up new funding sources at the State level and ensure that guidelines for accessing intervention funds are reviewed and made less stringent

• Formalise business incubation and mentoring programs to enhance the emergence of new SMEs

• Use the Chamber of Commerce as a hub for screening and custodian of special SMEs funds

• Set up SOS centers for SMEs. This will help address the wave of operation/intimidation by regulators, monitoring agencies, financial institutions and large corporates (SME clients and customers).

3.10 ACCESS TO LAND

Access to land in Lagos state for industrial and other uses is limited due to Land availability. Cost of acquiring land for commercial use in Lagos state is very high and mostly unaffordable to the private sector. Land title and perfection in Lagos State takes two to four years, one of the longest in the country, the stages involved need to be shortened to have a title for a maximum period of six months if not shorter. As the title approval is concerned presently, it is costing the private sector a lot of time and sometimesresult in extortion by the authorities and eventually becomes very expensive.

There is too much interference of area-boys or omo-nile on land matters in Lagos State. Inadequate or absence of proper enforcement for laid down land use procedures in Lagos State, vested interest on Lagos lands and captive ownership of large and strategic land across the state by powerful individuals in the state are some of the challenges faced in land process in the state. Companies and industries are moving out from Lagos State in a significant number



to nearby states principally due to the highlighted challenges of getting land with ease for either expansion or establishing newbusinesses.


• Multi-model use of lands in Lagos – Singaporean example is well suited for Lagos State

• Government to come up with a more transparent and efficient process of perfecting land titles and getting C of O or Governor’s consent

• Enforce the land use and zoning arrangement and let infrastructure be put in place before allowing for construction works

• Government to have a better engagement with the communityandcurbtheillsof“area-boysandomonile”.

• Enforce and punish citizens for failing to obey land use laws and regulations

• Put pressure on the FG to review and reform Land Use issues to boost large scale agriculture with the bigger picture aimed at establishing land banks.

4. RECOMMENDATIONS REqUIRING LEGISLATION

Harmonizing the overlapping functions/roles of the agencies on Lagos RoadsEnsuring that the agencies desist from duplication of multiple permits, charges

and feesParking permit should be handled by one arm of the government to avoid

duplication of leviesEstablish central performance tracking and management unit of all the

ministries and agencies within the Governor’s officePerformance Tracking and Management Unit should be in charge of setting

targets and tracking performance in the State among the MDAsPeriodic evaluation and performance review by the governor with all heads of

MDAsHarmonize/consolidate or streamline regulatory and monitoring institutions

with significant overlapping functions/responsibilities. Ensure proper coordination between government bodies in order to set clear

regulatory boundaries to eliminate overlap between agencies and streamline fees and levies affecting the industry.

Adequate funding and performance audit of regulatory and monitoring institutions to reduce impunity and their dependence on the private sector for funding with the attendant infractions.



Establishment of an apex monitoring agency in Lagos State to oversee the activities of other agencies. This will potentially help to address the overbearing excesses of the agencies.

Review the activities of Lagos state Tax consultants relating to the moral standing of the officials.

Consider a new and more innovative ways of collecting and enforcing tax revenues in the state as over 40% of collectable revenue by the state is currently diverted through various acts of corruption by the tax handlers.

Update the Lagos Master Plan. The current one may be out of dateEntrepreneurial Education: Retool post-secondary curriculums towards

entrepreneurshipstudies,“hands-on”skilltrainingatschools.Introduce work and school model, and roll out more industry incubation centers.PAYE computation for all expatriates in companies should follow same standard.

Discretionary PAYE computation for firms that have expatriates in their employment should be discontinued.

Government to come up with a more transparent and efficient process of perfecting land titles and getting C of O or Governor’s consent.

Put pressure on the FG to review and reform Land Use issues to boost large scale agriculture with the bigger picture aimed at establishing land banks.

5. FINAL NOTES

The most critical success factor for any government is having the right team with requisite skills and moral capacity to deliver the mandates of the government at any point in time. Lagos State is blessed with abundance of technocrats in all fields of endeavours. Thus, we sincerely implore the Governor to continuously seek for men and women of integrity, high morals, and competence as appointees who can combine their skillsand character in delivering his noble agenda fora progressive private sector and Lagos State Development Plan.

• Lagos State Development Plan (LADP) - 2012-2025:• Economic Development• Infrastructure Development• Social Development and Security• Sustainable Environment

5.1 BROAD ECONOMIC PLAN OF THE NEW ADMINISTRATION

The private sector is desirous to see the broad economic direction of the new administration in Lagos State articulated into immediate, mid-term and long-term deliverables. This will assistinvestors(local, foreign, existing and potential) to key into the aspirations of the present administration and take position to harness emerging economic opportunities in Lagos State.



Thereisneedtohave“Joined-up”government–agovernmentthatmovesforwardbycollatingthe impact of its previous policies to make future policies in a clearly articulated feedback mechanism.

5.2 INTERNATIONAL CONFERENCE AND ExHIBITION CENTRE

Lagos state is the only mega city known in the world without a conference and exhibition centre. This is a key and painful omission in the Lagos City which is negatively impacting on trade, commerce, tourism, transport and hospitality. Commercial activities in Lagos City will increase by 5% annually with a modern International Standard Conference and Exhibition Centre that is adequately located. LCCI will be pleased to collaborate with the Governor to achieve this within the shortest time possible.

5.3 CONTINUITY AND SUSTAINING LEGACIES: LAGOS CORPORATE ASSEMBLY

There is need to continue and sustain thegood work of past dynamic Lagos State Governors. Government to sustain the platforms for periodicand ongoing engagement between the State and the Private Sector (i.e, Corporate Assembly on quarterly basis), meetings with the state pensioners and MDA’s review by DFID should be expanded to cover other key MDAs. Lagos State adopted this model over the last six years and it has produced successful.

5.4 MORE COLLABORATION BETWEEN LCCI AND LAGOS STATE

Working closely and collaborating with the new administration in Lagos State, LCCI and the private sector in general want to see an improved business environment with desired and efficient infrastructure, transparent institutions, consistent policies, regulations, political will and enforcement. We believe that avibrant private sector in Lagos State especially the SMEs is crucial for providing job opportunities, addressingsocial/criminal vices, boostingprosperity and the happiness of all citizens.



ABOUT LCCI

The Lagos Chamber of Commerce and Industry (LCCI) is the foremost private sector group in Nigeria (since 1888) with over 1,750 corporate members, accounting for an estimated 70% of industrial output; 70% of general commerce and 75% of financial services in the country. Over the last 128 years, LCCI have emerged as the leading voice of the private sector through its sustained public policy advocacy, stakeholders’ engagement and trade promotion activities towards creating a conducive investment arena and prosperous economy.

PRESENTED BY: ALHAJI REMI BELLO, FCAPRESIDENT AND CHAIRMAN OF COUNCIL,LAGOS CHAMBER OF COMMERCE ANDINDUSTRY

SIGNATURE:____________________________ DATE: Julu, 2015



Contact LCCI

Commerce House 1st Floor1, Idowu Taylor Street, Victoria Island, Lagos, Nigeria

Tel: +234 -1-7746617, 2705386, 7732305, 803-382-7944Email: [email protected]: www.lagoschamber.com

THE LAGOS CHAMBER OF COMMERCE AND INDUSTRY

strategies for enhancing private sector productivity in lagos state

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