Any plans by businesses to survive amid the current economy recession in Nigeria must be built on a robust investment in research and development (R&D), an improved organisational efficiency, economic close watchers have warned.
Experts observe that in a recession, businesses need to reduce cost in some selected sections of the organisation and focus more on how to improve organisational efficiency and invest comprehensively on marketing, R&D and new assets.
Industry experts at a breakfast seminar organised by Pedabo Limited with the theme ‘Surviving the Tides, the Bumps and the Jolts: Building solid business success in 2017’ in Lagos advocated for organisations to diversify product and services; identify and eliminate all forms of wastages; sweat available assets to get maximum benefits out of them and to forge strategic, well-considered partnerships in order to thrive.
Oluseyi Olanrewaju, finance director, Vodacom Business Nigeria in his presentation titled: Building Business Resilience in a Recession: A way forward in 2017, observed that weak demand for companies’ products and services, low availability of cash flow management options, operational cost challenges, among other continued to threaten business in Nigeria today.
According to Olanrewaju, “Some of the ways great companies come out of recession stronger is through periodic assessment of business performance against pre-determined parameters; check and block revenue leakages and getting a balance between cost cutting to survive and investing to grow.”
Albert Folorunsho, managing consultant, Pedabo Limited, observed that recession was real and was here, saying companies must take proactive actions to survive.
In his presentation titled: Surviving the Tides, the Bumps and the Jolts, Folorunsho opined that tax obligations were critical in determining survival of businesses; transaction structuring was also critical; contract review; operational documentation, among other measure, were needed to stay competitive.
He however pointed out that drop in global oil price, drop in crude production output, political environment, loss of investors’ confidence, corruption had in no small ways contributed to the present economic predicament Nigeria was facing.
Folorunsho called on the managers of the economy to lower taxes and increase fiscal incentives, reduce direct tax rates, increased corporate and individual disposable income, introduce fiscal incentives and stimulant while boosting Private Sector Investments-FDI.
On his part, Tunde Fowler, executive chairman, Federal Inland Revenue Service, said now more than ever in our national development, there was a need for citizens to play a significant role in raising sustainable revenue for development.
Fowler in his presentation: Revenue Authority’s Mandate: Balancing Obligation With Taxpayer Empathy, observed that it had become clear over the years that reliance on perishable resources like oil as a source of revenue was ill advised and more organic sources particularly taxation, were reliable.
“This leads us to a bit of a dilemma because Government, through the FIRS and SBIRs needs to perform a delicate balancing act carrying out its obligations while being sensitive to the taxpayers own economic viability and well being,” he said.
He further said that Taxation places a higher burden of accountability on government, while providing taxpayers with a greater stake in governance. At its core, taxation is a social contract between Government and taxpayers.
To him, “Where citizens play such a significant role in raising revenue, Government will similarly have a strong motivation to account for revenues collected and their utilisation”.
“In actualising its mandate however, revenue authorities must ensure that every effort is made to see that the taxpayer is not overburdened,” he said.