By Omodele Adigun, Bimbo Oyesola,Isaac Anumihe, Adewale Sanyaolu and Olabisi Olaleye
From USA to United Kingdom, Singapore to Netherlands or United Arab Emirates, wherever you go, the vogue around the world now is the night time economy.
No country wants to be left out as both the developed and developing nations are bending over backwards to run economic systems, that enable consumers and businesses to trade and interact round the clock in a virtual mode that positively impacts manufacturing, services, media, creative and technological industries.
Experts believe that if the nation can buy into this system, by making use of idle resources in the night time, the advantages are just legion. For instance, “the vast army of unemployed youths can be incorporated into the formal sector of the economy by creating flexible working hours where they can go to school and work at their own pace, holding down part-time jobs. Employees will be able to make extra income which translates to increased spending and buying power to drive the economy.
“In the USA, 40 per cent of the American population is reported to work at night, weekends and rotating shifts. In the United Arab Emirates, the night economy has contributed immensely to its economic growth, by extending shopping hours in its mega malls and providing a wide array of leisure activities, fashion, jewelry, health, beauty and electronics, making Dubai a renowned tourist haven.
“The United Kingdom employs 1.3 million people in the night time economy which is worth £66 million. The Dutch capital, Amsterdam, deems the night economy so critical that it has a night time Mayor, who oversees the activities of the city at night”, says a columnist, Eudora Kelley.
But can Nigeria pull off such a feat? Many people doubt that considering the legion of infrastructural problems besetting the nation.
For instance, the Director General, West African Institute for Financial and Economic Management (WAIFEM) Prof. Akpan Ekpo, stated that for the country to achieve an economy that runs 24 hours, the issue of the development of critical infrastructure, of which power is number one, must be addressed, as he argues that the multiplier effect would eventually reduce unemployment
Ekpo said it is regrettable that a night economy that Nigeria ran in the 50s up to the late 80s had ceased due to bad leadership and governance which eroded most of the gains recorded in the manufacturing sector , hitherto the largest employer of labour, running three shifts and keeping companies in business.
He also pointed out no economy that runs on generator should expects gains, as only sustainable electricity can keep firms in business.
According to him, when the issue of power is addressed; it helps to solve problems associated with insurgency and security, which could be some of the obstacles to achieving a successful night economy.
The WAIFEM boss said a night economy achieved in the country in the 50s to late 80s helped so much to keep the unemployment index at a very low rate.
He explained that the institution of a night economy equally helps to develop middle level manpower for industries because those that could not be absorbed for administrative roles were used for low level manpower and trained in the use of machinery.
To return to the glorious era, he canvassed the review of the privatisation of power assets in the country, stating that those that bought the assets lack the technical know-how and finance to move the sector forward.
Ekpo said a review of the sector would reveal whether the investors were culpable or not. And in case they were found culpable, the sale should be reversed so that those with the requisite skill could take over and help the country to achieve a 24-hour economy.
On his part, the Chairman and Partner of the Energy and Natural Resources Practice Group, Bloomfield Law Practice, Mr. Ayodele Oni, equally echoed the views of Ekpo, that power is critical to the realisation of a vibrant night economy.
He equally listed a robust transport, and security network for the attainment of a 24-hour economy. Oni submitted that the country must endeavour to move away from the fixated style of 8 to 5pm work hour schedule, stressing that a flexible concept of an hourly pay could help the country achieve the running of a night economy.
He said workers should be able to choose a flexible time that would fit in into their day-to-day schedule, so that their free time, which could be in the night, can be used for productive venture.
On transport, he said an efficient public transport system and massive investment in rail and public buses would surely put the country back on track.
He explained that for the security system to be more efficient, street lights that would complement the efforts of law enforcement agents through the provision of 24-hour power supply would be of great impact.
On the other hand, Director, Centre for Petroleum Economics, University of Ibadan, Prof Adeola Adenikinju, advised the government that for the economy to run on a night mode, the purchasing power of its citizens must be strengthened.
‘‘It is only when a firm can operate above the installed capacity that it can be thinking of moving its operations to the night. When you cannot exhaust what you have produced during the day, why would you want to operate in the night,? he queried.
And to achieve this, he said electricity must be stable to encourage businesses, especially SMEs to move a huge chunk of their operations to night, while advocating more incentives for public utilities among others.
Adenikinju, however, regretted that a lot of capacities are idle in the night, which he said could be converted to raise capacity utilisation through incentives like tax rebates for firms that operate at night
The don said the flat rate billing system for utilities does not encourage companies to operate at night, saying there should be peak and off peak billing for companies.
‘‘For example, electricity, water and telephone tariff must be incentivised for those companies operating at night. The tariff could be halved because for the utility companies, the capacity and need for such services are reduced at night. And that low capacity utilisation at that period of day should be an incentive for others.
Once this happens, you find a lot of firms moving a larger chunk of their operations to night, knowing that they would pay half of what they ought to have paid for day time operations,’’
Adenikinju disclosed that the inability of the state to guarantee adequate security for lives and properties is also a great disincentive to night economy.
He said both the worker and the firm must be able to ensure that their security can be taken care of by the state so that they don’t spend additional cost on providing their own security apparatus.
Meanwhile, Mr. Chukwuemeka Eze, a tax practitioner, the six-hour lull in the economy is impediment to job creation.
He explained that with dwindling income from oil and the quest for the diversification of the economy, there is no better time to introduce night economy than now. “The deplorable security situation in Nigeria has dwindled night life in many Nigerian cities. Most commercial activities in Nigeria end at 6 p.m, except for transporters, super market operators, restaurants and hotels which may hang on till 10 p.m. This lapse in productivity from 6 p.m. to 6 a.m. in Nigeria bringing about a 12-hour lull is the biggest impediment to our quest to improve and increase employment in our country. In the United Arab Emirates and Singapore, for instance, most business activities run for 24 hours and workers are placed on shift duty,” Eze said.
How does this scenario relate to taxation? Eze explained that tax yield is directly proportional to production. “Where production is low, tax yield will also be abysmal. For the Federal Government to fulfil its promise to provide employment or the enabling environment for employment and increased productivity in Nigeria, it must exploit the advantages that are inherent in the night economy. A night economy will require more security, better infrastructure, better work culture and booming business, which are activities that will increase expenditure, a veritable derivative of indirect taxes. Enabling environment holds the ace for night economy “, he added.
Mr Taiwo Oyedele, Partner / Head of Tax & Regulatory Services at PriceWaterhouseCoopers (PwC), agreed with Eze that night economy will indeed help raise tax receipts through growth in economic activities. “This will also create more employment hence increase personal income tax, corporate income tax, and VAT will be also generated from these activities and so on.”
However, Oyedele argued that night economy, in itself, is not a thing to be created by government through pronouncements but by “ensuring necessary infrastructure and policies are in place to make this happen and thrive such as electricity, good public transport system, etc.”
Already the Nigerian banking sector appears set to leverage technology to increase the depth and understanding of customer preferences and changing needs in order to improve customer service offerings across all service channels for a vibrant night economy.
A bank executive said recently that night economy could be supported by the banks through electronic-payment channels such as Automated Teller Machines (ATMs), mobile phones (or mobile money) or through online banking because of the risks involved.
For instance, the Central Bank of Nigeria (CBN) in its Payments System Vision(PSV) 2020 documents reinforces the fact that ”impressive growth of electronic payments and a move from the dominance of cash as a means of payment” That is what should be applicable to night time economy.
The starting point for Nigeria in improving investment in the night economy is to create an enabling environment for businesses to thrive.
According to the Organised Private Sector (OPS), night economy would remain impossible if government continues with its lacklustre disposition towards businesses and investments in the country.
The Nigeria Employers Consultative Association (NECA) is confident, for instance, that if government could provide enabling environment for the private sector , it would no doubt lead to 24-hour economy for the country.
The Director General of NECA, Segun Oshinowo, said infrastructure and security are the basic essentials that had been the clog in the wheel of progress of the business community in the country, wondering how businesses could thrive in an environment of crime, bad roads and where functional electricity cannot be guaranteed, even now that Nigeria runs a day economy.
He said, “Government should create an enabling environment for businesses during the day first. Let our government support the businesses, which are wealth creators to maximise their potentials and contribute their quota to the revival of the economy.
“In a situation where the business is not guaranteed in the day, we cannot be talking of night economy.”
Similarly, the President of Manufacturers Association of Nigeria (MAN), Frank Jacobs, shared the same view about infrastructure with Oshinowo, as he specifically noted that electricity would continue to be a stumbling block to Nigeria’s dream of attaining global relevance in the real sector.
“How can you talk of night economy, when you don’t have power. Most businesses manage to run eight hours production on generators, and that is a lot of money. In the real sense, production in the manufacturing sector supposed to be a 24 hours operation, but how can you achieve that here when the electricity is comatose”, he said.
The MAN President lamented that it was unfortunate that Nigeria with a population of over 170 million could only boast of 3,000 megawatts of electricity, whereas South Africa with a population of 40 million people has over 50,000 megawatts of electricity.
“We cannot talk of night economy presently, until power is fixed. For now our government should think of how to salvage the economy, improve on the infrastructure, that would naturally boost business at whatever period we want to run it”, he said.
But Odilim Enwegbara, a development Economist,was of the view that most countries in Europe, North America, and Asia do everything to encourage and promote night businesses, stressing that night businesses in most developed economies, are not less than 10 per cent of their GDP and above all, a major source of value added tax. That’s why most countries in Europe, North America, and Asia do everything to encourage and promote night businesses.
But to provide night businesses in Nigeria to the extent of being a major revenue earner for government, security should be made a top priority. Public transport sector should be world-class and round the clock.
But above, culture and religion could be a hindrance to promoting night businesses in some parts of Nigeria.
Telecommunications stakeholders have said night economy may be possible, only if certain infrastructure is put in place.
According to Chairman , Association of Licensed Telecommunications Operators of Nigeria (Alton), Mr Gbenga Adebayo, night economy is a wishful thinking because what the country lacks such as security, power and total cashless economy will work against it.
“It will be very difficult because the reason filling stations do not operate 24 hours is because of insecurity. And only when absolute cashless transactions ,power and security are seen to be paramount can the desired night economy to be achieved.
“And for that to happen, we need to improve more of our cashless transactions , so that when there is cause for late night transactions, security and cashless transactions take care of that challenge, he said”.
Speaking,in the same vein, former President of Joint Action Information Technology Advocasy (Jacitad), Mr Prince Osuagwu, disclosed that the reality of night economy is dependent on infrastructure.
Said he: “It is possible to have a night economy if it can be done in other places of the world, why not Nigeria? But it is not done by wishful thinking, so many things will have to be in place before it is done. Now, if you are a telecom operator with a base station (BS) in Mushin and checked through the monitoring equipment and discovered that the BS has broken down. And it is not automated to be repaired remotely on the spot. But has to be done and the time is as late as 2 am in the morning. Would you advise your engineers to go and fix it? No, because you will be creating more problem than what you intend to solve because of lack of security.
“If, night economy must be achieved in this country, security and power must be at its maximum and people’s orientation in one way or the other must change. These things are not done in a year or even 10 years but consistent things that will take a whole lot of time is involved.
If we get our people to know that a BS in the locality is for service and the responsibility to keep it and those working on it safe. What this means is that any worker can go any time to rectify BS faults.
Generator supplying diesel to these base stations ought not to be there if there was steady power supply but people should be made to realise that these things were put there for them to have steady communication and there has to be respect for people that have come to refuel the generators or clean the equipment to serve them well. But in a situation where you see an operator as a cash cow to be milked with all sorts of reasons. It is something that has to be nipped in the bud. It is not only the telecoms industry alone but what cuts across all other industries”.
On his part, Chief Executive Officer/Managing Director of Pointek Ltd, Mr Emeka Oguchi, also maintained that night economy is possible contextually because we are witnesses to it elsewhere.
“We travel all the time and see it, they are human beings, not spirits. But people and their way of lives, thinking and maturity make it work. First of all, basic infrastructure must be put in place like power and security. People must be sure of their safety without being harrassed by hoodlums or armed bandits.
“If night economy is encouraged and revived, it will accelerate the GDP because the recharge card seller is selling, the mobile phone shops are opened, soft drinks seller is doing same and the factory is running”.