Professor of Law at Baze University in Abuja, and former chairman of the Nigerian Electricity Regulatory Commission (NERC), Sam Amadi, has said the Nigerian business environment is not convenient for local and foreign investors because of under-regulation and archaic laws. The professor said this in an interview with Nairametrics recently.
This is contrary to the opinion of many businesspeople who claim that the Nigerian business environment is over-regulated.
According to Amadi, the Nigerian business environment is not very convenient for foreign and local investors. “The reason is not because of over-regulation. Actually, Nigeria’s business environment is under-regulated. The real problem is that the laws are archaic and do not meet the logic of modern enterprise. The laws often do not address the incentive structure of business efficiency,” he said.
The Land Use Act
He went further to say that Nigeria needs to amend the Land Use Act. “You cannot be an efficient and competitive business environment if you have a land law that gives governors so much power over land and its transactions.
We need to give people the opportunity to transact freely on land without waiting for the consent of the governor. We should amend the Land Use Act. We should move many items on the exclusive list to the concurrent list and make the social and economic rights in the constitution partly judicially enforceable,” he stated.
Issues with taxation
Commenting on the effects of taxation on the Nigerian business environment, Amadi said the problem of taxation in Nigeria is three-fold. “First, not enough people are covered under the tax bracket. We should get more people and businesses into the tax bracket. The second problem is that those who pay do not pay the right amount of tax. We need to make sure that those who earn more pay more.
This means that our tax code should be somewhat progressive rather than retrogressive. Even if we give tax breaks or tax incentives they should be well-defined and targeted to real and measurable contributions to the economic well-being of citizens.
Thirdly, we need to have clear and enforceable codes. We should have streamlined tax codes that discourage multiple taxations but ensure that all entities that ought to pay tax pay the right amount,” Amadi added.
Amadi also commented on the federal government’s debt with the CBN. He said the securitization of the Ways and Means loans of the CBN to the FGN to debts violates the CBN Act. “It looks convenient for the CBN and the government but would create a moral hazard that encourages monetary recklessness. It is a corrupt way of aiding and abetting the violation of the law and creating false comfort that will lead to unsustainable monetary practices,” he stated.