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Utomi links collapse of companies to regulatory risk, lack of national strategy
Leading political economist and former presidential candidate, Prof Pat Utomi has given insights on why many Nigerian companies collapse few years after set up.
Speaking in Lagos at the Regulatory Conversations 4.0 themed ‘Foreign Exchange Restrictions on Food Imports and Implications for Regulating and Growing the Nigerian Economy,’ he averred that many hitherto hopeful companies had collapsed in Nigeria due to regulatory risk and lack of national strategy.
He argued that for a company to survive the harshness of the Nigerian economy, “it should have a clear national strategy that it wants to become global leaders in these one, two, three areas.
According to him, “We can do isolated industrial policy to those areas of which our endowments allow us to become competitive globally and dominate that value chain.”
The founder for Centre for Values in Leadership (CVL) noted that negative legitimacy would not take the country anywhere rather it would destroy businesses and lead to increase in unemployment rate.
While identifying key corporate collapsing factors in Nigeria, Utomi averred that “The biggest risk in doing business in Nigeria is regulatory risk. The regulator is more likely to kill a company than any market risk.”
The University don, who recalled that certain sector of the economy had been wiped out by an unthinking regulator’s actions, advised that time has come for the federal government to think through the consequences of its policies before implementation, insisting that “restrictions would not take the country anywhere.”
He also called on core players with deep sense of experience to always advise budding firms on issues relating to the consequences, saying “Part of our duty as players in this, is to say to ourselves, look this economy belongs to all of us; can we begin to educate ourselves on the consequences.”
Earlier in his keynote address, the Director-General of Lagos Chamber of Commerce and Industry (LCCI), Mr Muda Yusuf made it clear that “The regulatory environment was one of the biggest challenges being faced currently in business in the country.
While arguing that regulators meant well for the country, he noted that “Unfortunately, we don’t have regulators who are in government, who actually listens or engages so that you can have the right kind of strategy to achieve the desired result.
According to him, “There are too many regulations in the country and the damage it is doing to the economy is enormous.
Yusuf disclosed further that “To do business with integrity in Nigeria today is a tall order,” revealing that several businesses had gone under because of challenges of regulatory compliance.