Nigeria’s government needs to help businesses stricken by the economic impact of COVID-19 and harsh policy by reducing interest rates, Chris Okoro, CEO of engineering services company Interlinked Technologies Plc, tells The Africa Report.
Interlinked can’t afford to borrow from banks at interest rates of 15-20% or more, Okoro says in Lagos. “We expect a reduction in interest rates. Only the government can do it.”
The company, which trades on the Nigerian stock exchange, supplies engineering and technology to sectors including power, oil & gas, manufacturing and infrastructure.
It relies heavily on being able to import products from abroad to service clients including the Dangote Sugar Refinery, Shell, Siemens and Lafarge.
The fact that many foreign suppliers were themselves in lockdown hit Interlinked hard. Shipments that usually take two months turned into four-five months.
The company expanded its supply chain and turned to air freight as a solution, but that’s three to four times more expensive than shipping.
The result was “very serious shortages” of equipment as well as a lack of expatriate labour for installations, says Okoro.
Meanwhile, restrictions on movement in Nigeria made it much more expensive to move equipment around. Some clients were short of cash and unable to make advance payments.
These included government projects relying on public funding says, Okoro. Risk-averse banks, he adds, were not willing to listen, More tax concessions for businesses are also needed to recover dying busineses, adds Okoro.
Nigeria’s Federal Inland Revenue Service (FIRS) has issued a waiver of penalties and interest on some outstanding tax liabilities provided these are settled by 31 December.
The KPMG accounting firm has said that the deadline may come too soon given the double hit from COVID-19 and the EndSARS protests, and that tax authority should consider extending it.