Kill multiple taxation for economy growth in Africa – Emmanuel Iheagwazi
Dr. Emmanuel Iheagwazi, a Nigerian businessman, philanthropist and industrialist of repute, is the Founder and Chief Executive Officer of Climax Lubricants Industries Limited, a fast-growing lubricant blending plant in Nigeria and West Africa. He is a graduate of Mass Communication from Uthman Dan Fodio University, Sokoto. Climax Lubricant Industries Limited is one of the companies established by his humble self. CLIMAX LUBRICANT INDUSTRIES LIMITED was established to bridge the gap identified in the lubricant markets in Africa as contained in this exclusive interview with the Editor-in-Chief of the prestigious Pan African International Magazine, Prince David Anyia.
What is the vision of this prestigious organization called Climax Lubricants Industries Limited?
The vision started so many years ago, precisely in the year 2012. Well, I was the major distributor of lubricant oil with some of the most pronounced lubricant brand, like Total Nigeria Plc, Lucan Nigeria Limited and many others, but it came a time that the market was invaded with so many substandard lubricant products, unbranded names of all kind of substandard products, so customers began to patronized these products because of affordability, the price was lower than the ones that were tagged original. As a distributor, I tried hard on how these inferior products can leave the market because I know how negatively and harmful such products can affect the vehicles that use them and equipment that such products are used on. It was a herculean task. So, I decided that, since I cannot fight harder enough to take off those inferior lubricant products off the market, then, I will not sell such products, but rather I am going to create an alternative product that will bridge the gap and provide quality and efficient lubricant oil to the Nigerian market. This is like taking the bull by its horn; it’s not without a fight. So we started building a lubricant brand that will be quality to offer the yearning customers the best affordable and efficient lubricant brand. That is how climax has come to stay and to be the Climax of the Lubricant Industry in Nigeria.
Do you see other major players in the industry as threat?
Well, there is absolutely no life without competition. In the world of business competition determined prices and quality. As for threat, we don’t see any threat within our competitors, Uh, let me tell a narration from the Holy Bible; the Holy Bible says clearly, when Moses was asked by God to go to Pharaoh and that he should tell Pharaoh to let His people go; when Moses got there, Pharaoh asked for a sign, and Moses turned the rod in his hand to a snake; Pharaoh also commanded his magician to do the same miracle, so on that day, there were multiplication of snakes, but something happened; Moses’ snake began to eat up the Magicians snakes, so in essence, I am saying that competition is necessary, but if God is your backup and you are doing the right thing by producing quality products without cutting corners, then you don’t need to be threatened by any competitor.
As a seasoned entrepreneur, what are your predictions concerning this new administration of His Excellency, Bola Ahmed Tinubu?
I am not a politician, I am a businessman, I leave politics to politicians, and I would like to reserve my comments. I think it’s rather too early to begin to make prognostications about this government that has just started. However, I will say that Tinubu government should focus on infrastructural development, providing the basic amenities for the masses, have an open hand for direct investment, curbing multiple or double tax which is a business killer in this nation and bringing together members of the business community who are doing well in their various fields of endeavour. Tinubu’s government should not leave its administration to politicians alone, they will ruin his efforts, rather let him involve technocrats, business men and women and people who are experts in their fields.
I want to site an example: in my organization where we are located, there is absolutely no government presence, no electricity, no good road. All the basic amenities that the government is supposed to provide are absent in that location, so, we provide our basic amenities to enable us continue production, and you imagine the government providing these needs, how our overhead cost would drop drastically.
Also, I want the government to know that, the business community in Nigeria is sacrificing a lot and they are being over taxed. I believe that, this government should be lenient on businesses, SMES, and organizations to avoid bankruptcy or companies leaving the shores of this country.
What is your take on Fuel Subsidy Removal?
Fuel Subsidy removal is a necessity, it is a devil that must leave this country, the funds that are used for fuel subsidy, if put into good use can bring about a drastic revolution in many areas including infrastructural development. Having said this, as it is often said, ‘he who fails to plan, plans to fail’, my opinion would have been that before the complete removal of fuel subsidy, there ought to have been some palliatives and proper planning in place like issuing of licenses to more marketers to be able to bring in the products into the country, making sure that the refineries work and create incentives and promo.
For Example, about two years ago, the Chinese government decides to go into Electric Vehicles (EV) manufacturing because of their concerns of climate change and the high cost of Premium Motor Spirit (PMS) in the country. The government instituted a complete tax exception status as an incentive to any company capable of manufacturing electric vehicles. One company rose to the occasion and built the first EV Cars. As of today, China has over two hundred companies manufacturing EV Cars within China; out of every ten vehicles you see on the road in China, six are electric vehicles.
Secondly, the Chinese government came up with another policy of free vehicle registration for electric vehicles, so it means if you buy an EV, your registration is free, whereas, if you buy the vehicle that uses petrol, you pay for its registration; by so doing, people rushed to buy EVs.
Thirdly, as a means of promotion, the government removed restriction on EV cars in areas that are restricted because of heavy traffic, that means, as an EV car owner you are free to drive in such areas. These are some of the preparations and plans that I expected from His Excellency, before making that pronouncement. So, His Excellency the President of Nigeria should begin to look at avenues that will force the fuel price down in the nearest future.
Also, the removal of Foreign Exchange pegged at 450 per dollars is another policy that I frown at because Nigeria imports most of its raw materials. Some of the funds recouped as a result of fuel subsidy removal should be used to peg dollars at the official rate of N450 per dollars, if not, this in the nearest future will cause a spike in the cost of goods produced. Already the inflation rate sits at about 22.4 percent. If the inflation rate goes up again, Nigerians would really have a hard time coping.
In Dubai, the dollar exchange rate to their currency has been constant ever since with about 3.6 to dollar, in China it was 6.8 but recently moved up to 7.1 and in Japan it is about 1.35 to dollar, so Government should do something about it.
“Dangote refinery will end Nigeria’s fuel Scarcity.” What is your view on this?
I salute Dangote’s courage. Dangote as an individual has made history and history will not forget him in a hurry. He is a true businessman that has his foot print in the golden sand. However, there is a lot of government backing and support going on as we know that Nigerian government has 20 percent equity in the refinery, so to be fair, I believe that government should also backup more outstanding businessmen and women in this country including me. The Nigeria market needs to have a healthy competition which is the only solutions that would bring about price control.
For example, when MTN came to Nigeria, how much was their SIM card sold for? Now that there is competition SIM cards are almost free. So, if the government can give me the same equity they gave to Aliko Dangote on the refinery project, I will replicate that project and even bigger. So I am appealing to the government to select at least ten more business people in Nigeria including me to support on various projects.
In Russia, they have countless refineries, in Iran and even in the United States of America; Nigeria also can have more refineries.
What can be done to curb unemployment in Nigeria?
First of all I want to say that unemployment can be tackled! Recently I watch a video on “Why Africans Are Having High Unemployment Rate.” I shared the video with some tax officials, but the more I share it, the more they taxed me; that video made a lot of sense. The truth is that the major business killer is double or multiple taxation. As a matter of fact, most companies that are leaving Nigeria is as a result of not having a good business climate to operate in; the issues of poor or no infrastructure, epileptic or no electricity and multiple taxes are big challenges to businesses. The Government must stop borrowing money from foreign nations to in-turn put the burden on its citizens. China built their country in just fifteen years; they supported their people with loans and grants, they excluded taxes, the infrastructure was good, the security was good, that is why it is cheaper to buy Chinese goods than from other part of the world.
So Nigeria can replicate that too, and when we do, then shall we truly be called the “GIANT OF AFRICA.” I wish this country well.
