…Laments MAN can’t fight state
Engineer Ikpong Umoh is the Chairman of Toiletries & Cosmetic (T&C) Manufacturers Group of Manufacturers Association of Nigeria (MAN), elected since 2013 to pilot the affairs of the group comprising sixteen sub-sectors of Toiletries & Cosmetics, Industrial, Medical & Special Gases, Paints, Varnishes & Allied Products, Soaps & Detergents, Agrochemicals (Fertilizers & Pesticides), Pharmaceuticals, Safety Matches, Petroleum Products, Candle Manufacturers, etc.
Through pro-active engagement in activities that strengthen the Association, Umoh who doubles as the Managing Director and Chief Executive Officer of Stellarchem Industries Limited and the Vice Chairman of Chemical & Pharmaceutical Sectoral Group of MAN seeks to make the group vibrant, effective as an umbrella body for all cosmetics manufacturers in Nigeria.
He has been very vocal, actively engaging government parastatals and regulatory agencies on adoption of global best practices with respect to local industries. His vision is to create a viable and sustainable platform for learning and educating members of the group at all levels on emerging trends in the industry, and furthering research into manufacturing processes to promote the use of local raw materials in cosmetics.
In this interview with our reporter, Chibuike Kelechukwu, the University of Ilorin Industrial Chemistry and Business Management graduate of the University of Wales, Cardiff, described the Lagos State borehole tax as illegal but regretted the Manufacturers Association of Nigeria (MAN) cannot challenge the policy in court. Reason: The money game weapon in a cut throat competition between big companies and the upcoming ones.
According to him, this is the new challenge facing manufacturers in Lagos State in addition to the hostile economic situation in which they operate.
Below is excerpt of the explosive interview.
Lagos State Underground Water Regulatory Agency
As you are well aware, because of the precarious economic situation, Lagos State where we operate from is looking to raise money to boost its internal revenue generation mechanism. In the attempt to do that, all agencies, departments and ministries of its government have metamorphosed into regulatory agencies. You can imagine the kind of multiplicity of regulation that arises from this kind of situation.
The most recent one which gives everybody serious concern is the Underground Water Regulatory Agency that was set up by the state government. You know that water is one of the amenities that should be freely provided by the government and all over the years, the Lagos State Water Corporation has not been functional. Even when they function, they were pumping out unsafe water for drinking. Now it is not functioning at all. You can imagine that the state government, rather than owning up to its failures and looking at ways of improving on all those inadequacies, is now placing the burden on residents. People have no choice but go all out on how to get safe drinking water. As a result, many people have to drill private boreholes. Ordinarily, if government is providing safe drinking water as it should, nobody will go into drilling boreholes.
Now, having seen that many people have resorted to drinking borehole as only alternative, they have come up with a regulation saying that we are defacing the water level and therefore must pay. So whoever has dug borehole has to pay Lagos State for digging that borehole.
Not only that, they have also made it mandatory that even after you have paid that retroactive rate (because it started about ten years ago), you must collect a meter and put it in your borehole so that as the water is running they are charging you based on the volume of water. So you can imagine how really sad it is. We are just having a situation that government has seen that it has failed in its duty and instead of redressing that, it is now putting the burden on the people by imposing tax on borehole owners. It is unfair.
Is the burden limited to manufacturers or individual house owners too?
Water is what everybody needs. Even animals need water. So even if you have dug a borehole to feed your animals, you must pay. I’m suspecting that the way Lagos is going, it will someday look for a way of regulating the air that we breathe. I am also not oblivious of the fact that they might extend it to toilets, such that when you dig a soak away, the government will tell you well, you have dug the state land therefore you have to pay for it. Some of these regulations look to me as if they are made for a conquered people. They don’t have a human face. Recently I listened to the Environment Commissioner, talking tough on this issue. It more or less looks like everybody has forgotten that we are in a democratic dispensation where you can stand up and express your dissatisfaction on any government policy. Because they have cornered the police, have their own foot soldiers, KAI, LASMA and what have you they think that they can cow all of us into submission and force down our throats certain things they should not do.
MAN going to court or not for redress?
Well it is something that is subject to litigation, but you know what happens in this government we are in, which is that the judiciary has lost its independence. So, they already decide a case before going to court. We are living in an era of illegalities, an era when people hide under the cover of democracy to do undemocratic things. Now, if you look at what is happening throughout the federation, don’t forget that today we are having APC government in power. APC has been in Lagos all this while. Now that they are also at the federal level, chances are that they are going to import what they have been practicing in Lagos into the whole federation? This is what is going to happen. Again, you see that many of the Federal Government agencies have also reeled out rules, regulations and what have you to be able to regulate. So, almost all of them are also regulatory agencies, and what is the purpose? Revenue!
The Money Game and politics in MAN
Whether MAN cannot take up this matter in the court? I must be quite frank with you. I am not speaking for MAN, no. The Association is very big. It has over 78 subsectors in there. And you know, in such very large group, the symbolism of the ‘Animal Farm’ is expected to play out. Yes all animals are equal but some are more equal than others. That those who dictate the kind of action that MAN should take and those who disagree but recently it is not every one’s opinion that MAN is going to carry forward. In particular, multinationals have had a very strong influence on the economy. They have a very strong influence wherever they are. So it is not unlikely that in MAN, multinationals have strong influences when it comes to the policy. Why would they want and why would they not want to go to court? There are so many issues to it.
Money defines market place cut-throat competition
Now, in the market place, SMEs and multinationals are not the best of friends. There is cut throat competition going on out there. Where the multinationals are operating, they want to make sure that SMEs are not in that market. In fact they will look for all ways possible to make sure that they take steam out of the SMEs. So if Lagios State is regulating even the air and they know that they can pay and go ahead with their business, if money is the name of the game, lets play it. The multinationals would say. Before you know it, SMEs with their lean capital base, will fizzle out. So, for some multinationals, the illegal legislations and regulations that government brings becomes a legitimate tool for them to use in the fight against the SMEs in the market place. Once the SMEs pay the tax this year, and cannot afford it going forward, they exit the market. They stop operations and the multinationals will have the field as it were. So there are certain imperatives that we have to consider when we ask why didn’t MAN take up this case in court. Definitely this a case that MAN ought to fight but as far as I know, today MAN has not for once mentioned it for reasons best known to its top hierarchy. They definitely avoid mentioning it. That is why today MAN is not on any war path with Lagos. I have also noticed that so many things that Lagos State is doing that actually disadvantages the SMEs operators, MAN is not saying anything because as I have said it on several occasions, if money is the name of the game they can play it. The SMEs cannot afford to play for too long, and so they exit the market. The lesser the SMEs come to the market the better for them. It is a money game.
How much is the tax?
This thing is reviewed upwards every time. As at the last time, I understand that they said people should about N18, 000 and it is backdated to ten years ago. So you multiply by ten which is about N180, 000. In addition, you buy the meter for metering the volume of water you pump out which will subsequently determine how much you pay.
As to whether it is the same flat rate, no. It is categorised. They mentioned some fees. Some of the fees they are charging is to take people away from the seriousness of the situation we are facing. Some time, they mentioned about 30 to 50 kobo per liter of the water we are pumping. It will not be constant; over time they will keep on upgrading it. The disparity I am talking about is that they probably look at places like Ikoyi and knowing that even if they mention N100, the residents will pay without agitation. So they will slam them with N100 charge and move on. They come to government rejected areas, and say well, because of this kind of place and poor residents, pay 50kobo per litre or thereabout. So, it is not standardised. By trying to segment the tax, they tend to give the impression that they care so much for the people whose income are not as high as the others. This is very deceitful. Government should not tax amenities which they cannot provide.
It is only in Nigeria that government stands up and says something, whether you like it or not you must comply because they are going to use area boys they have sown new uniforms for to harass people and enforce compliance. These are the kind people they use for collecting such illegal taxes.
So, Lagos has become a state in which might is right.