Post by Trade facilitator on Sept 5, 2017 8:51:54 GMT 1
The real sector has many challenges – dearth of infrastructure, multiple taxation, and stiff regulation, among others. Added to these is the power challenge, which has rendered the sector prostate, according to the Managing Director/Chief Executive Officer (CEO), The Thy global investment limited, Ismail AbdulAzeez. In this short interview with FADARE ADEKANMI, he says manufacturing segment of the economy will do better if power is stable.
Sir, what is your position on the federal government cassava initiative and how is your company, The Thy global investment addressing the policy?
The cassava initiative com policy was a welcome development and we at The Thy global will constantly support government’s policies that is aimed at helping to grow the Nigerian economy. In demonstration of this, we have been investing heavily on sensitizing Nigerians on how best the can benefit from the gesture. We have initiated an export training channels where we teach prospective exporters on the best practices in exportation of various commodities from Nigeria.
A lot of Nigerians have participated in our training programmes and have thus commenced export/import business courtesy our continuous supports.
More than ever before, the federal government has created a stronger bonding between players and the ministry of agriculture. We are working together in ensuring that the policy is properly articulated when it comes into effect and that it can work in the overall interest of Nigerians.
What are the implications of high interest rate on manufacturers’, exporters’ and importers’ operations?
The interest rate in this country is among the highest in the world. Unlike America and Europe where interest rate hover between one and two per cent, we in Nigeria operate an interest regime of over 15 percent. After the not too long rebasing, the manufacturing sector accounted for only seven percent of our gross domestic product (GDP)
The implication is that government still needs to focus more on the real sector because that is the heart of the economy; that is where we can generate foreign exchange, bring about food security and generate more employment for the people.
I am very hopeful that the federal government can do more to help the central bank of Nigeria (CBN) in its efforts to further bring down the interest rate.
How can the tax system be improved?
Taxation in Nigeria has never been better managed as it is now; we are now in a situation whereby the contribution of taxation or the relative relationship of taxation to the GDP is much higher than what used to be obtained but even at that, when you compare the ratio of taxation to GDP, it falls short. I think the last tax to GDP ratio was 12 percent, however before the rebasing it was 20 percent, compared to a tax rate of 30 percent, which means that tax management system needs to be more strengthened. However, in terms of administration, I think the tax authorities are doing well.
How has the current tax structure impacted on your operations?
As a law-abiding and a good corporate citizen, we are subject to paying tax as established by regulatory authorities. So, it’s normal for us that there must be taxation in every business, the least we can do is to simply comply and pay whatever tax that is established for us.
Inadequate power supply poses great challenge to many businesses in Nigeria. How has your company been operating and coping?
Energy in most businesses is very critical. Unfortunately, we have not derived much benefit from the national grid. Since we started about 12 years ago, we have always run on self-generated power supply. So we can appreciate the cost implication of running generator with fuel in our environment. It is a heavy cost, which is avoidable and we are looking forward to that day when business outfits will have to fully depend on power from the national grid to run their business.
How will you assess the performance of your company in the last one year?
Given the business environment in which we operated in the past twelve months which ended July, 2017, I want to say that it has been very tough. We were confronted with a lot of challenges which are related to heightened competition among players in the market, especially from the coal export segment of our businesses. There is now intense competition in the agricultural commodities export landscape where we operate, but we are more focused, purposeful and with committed work force, we are equal to the task of satisfying our numerous clients.
Our number one competitive tool is the quality of our services ( training, clearing and forwarding, sourcing for exportable goods and proving destination channels to our clients), quality goods, which we don’t compromise on, we shall continue to remain number one in terms of services and quality delivery.
It is also instructive to note that other key drivers of our superlative performance are our people, clients, workers and board of management.
What are your expansion plans?
Yes, in fact that is the medium to long term plan of business, to have a one stop-office. We are expanding by investing in a multi-hectare land in Ogun and Oyo States, the implication of that is that we will be in position to expand across many other fields (property) where we presently offer a lot to the market.
Sir, what is your position on the federal government cassava initiative and how is your company, The Thy global investment addressing the policy?
The cassava initiative com policy was a welcome development and we at The Thy global will constantly support government’s policies that is aimed at helping to grow the Nigerian economy. In demonstration of this, we have been investing heavily on sensitizing Nigerians on how best the can benefit from the gesture. We have initiated an export training channels where we teach prospective exporters on the best practices in exportation of various commodities from Nigeria.
A lot of Nigerians have participated in our training programmes and have thus commenced export/import business courtesy our continuous supports.
More than ever before, the federal government has created a stronger bonding between players and the ministry of agriculture. We are working together in ensuring that the policy is properly articulated when it comes into effect and that it can work in the overall interest of Nigerians.
What are the implications of high interest rate on manufacturers’, exporters’ and importers’ operations?
The interest rate in this country is among the highest in the world. Unlike America and Europe where interest rate hover between one and two per cent, we in Nigeria operate an interest regime of over 15 percent. After the not too long rebasing, the manufacturing sector accounted for only seven percent of our gross domestic product (GDP)
The implication is that government still needs to focus more on the real sector because that is the heart of the economy; that is where we can generate foreign exchange, bring about food security and generate more employment for the people.
I am very hopeful that the federal government can do more to help the central bank of Nigeria (CBN) in its efforts to further bring down the interest rate.
How can the tax system be improved?
Taxation in Nigeria has never been better managed as it is now; we are now in a situation whereby the contribution of taxation or the relative relationship of taxation to the GDP is much higher than what used to be obtained but even at that, when you compare the ratio of taxation to GDP, it falls short. I think the last tax to GDP ratio was 12 percent, however before the rebasing it was 20 percent, compared to a tax rate of 30 percent, which means that tax management system needs to be more strengthened. However, in terms of administration, I think the tax authorities are doing well.
How has the current tax structure impacted on your operations?
As a law-abiding and a good corporate citizen, we are subject to paying tax as established by regulatory authorities. So, it’s normal for us that there must be taxation in every business, the least we can do is to simply comply and pay whatever tax that is established for us.
Inadequate power supply poses great challenge to many businesses in Nigeria. How has your company been operating and coping?
Energy in most businesses is very critical. Unfortunately, we have not derived much benefit from the national grid. Since we started about 12 years ago, we have always run on self-generated power supply. So we can appreciate the cost implication of running generator with fuel in our environment. It is a heavy cost, which is avoidable and we are looking forward to that day when business outfits will have to fully depend on power from the national grid to run their business.
How will you assess the performance of your company in the last one year?
Given the business environment in which we operated in the past twelve months which ended July, 2017, I want to say that it has been very tough. We were confronted with a lot of challenges which are related to heightened competition among players in the market, especially from the coal export segment of our businesses. There is now intense competition in the agricultural commodities export landscape where we operate, but we are more focused, purposeful and with committed work force, we are equal to the task of satisfying our numerous clients.
Our number one competitive tool is the quality of our services ( training, clearing and forwarding, sourcing for exportable goods and proving destination channels to our clients), quality goods, which we don’t compromise on, we shall continue to remain number one in terms of services and quality delivery.
It is also instructive to note that other key drivers of our superlative performance are our people, clients, workers and board of management.
What are your expansion plans?
Yes, in fact that is the medium to long term plan of business, to have a one stop-office. We are expanding by investing in a multi-hectare land in Ogun and Oyo States, the implication of that is that we will be in position to expand across many other fields (property) where we presently offer a lot to the market.
