Press Releases

Power Shortage: Fashola Advocates Tax Holidays For Industrial Sector

Aug 18, 2009 - Lagos State Governor, Mr. Babatunde Fashola (SAN), Tuesday advocated tax holiday for industries in the country as a means of compensating for the deficit they suffer as a result of lack of adequate power supply.

Governor Fashola, who spoke at the official commissioning of Nutricima Ultra Modern Ready-to-Drink Factory belonging to Nutricima Limited in Ikorodu, said such tax holiday should be commensurate with the percentage of additional cost they bear during production as a result of providing their own power.

He declared: “I will like to suggest that even as we are trying to respond to the power needs, may be we may become a little more creative by using the absence of power as a stimulus; and this is what I mean; if companies such as this is providing their own power, will it not be beneficial if we created a tax holiday to make up for the difference?”

The Governor continued, “I think their cost of production is about 40 per cent taken up by power and a tax remission in that area can only mean more production, more investments and more jobs for our people”, Governor Fashola said adding that since the Federal Government collects taxes from the profits made by companies, it should consider this option for the continued growth of the nation’s industrial sector.

Appealing to the Minister of Commerce and Industry, Chief Achike Udenwa who was also present at the occasion, to take the suggestion seriously, Governor Fashola pointed out, “We, as a State Government, have a role to play and our own role is to ensure an environment that is safe and secure; an environment that is characterized by reliable infrastructure such as road network to enable the efficient distribution of goods and services”, adding that the State Government remains committed to continue to discharge these responsibilities.

Governor Fashola saluted the courage of PZ Cussons International, Manchester, UK and Glanbia Ireland, the two companies that own the factory, and for their continued trust in the economy of Nigeria pointing out that such trust is an indication that Nigeria and Lagos still remain the investors’ haven.

“Those who have knowledge of Financing recognize that capital have some returns and, therefore, while one must commend the decision of the companies to stay in Lagos and Nigeria, one must also appreciate that it is not an investment without evaluation of risks”, the Governor said adding, “The risk evaluation indicates only one thing and that is that Lagos and Nigeria remain investors’ delight as the world faces a global crisis”.

He continued, “It makes a lot of sense. All of the resources that sustain humanity from cocoa to gold to diamond and copper and to crude oil are extracted from this Continent. Now, as the global economy suffers a buffeting, anybody who wants to invest and want to continue to be in this kind of business will move closer to the resources”.

The Governor advised the two companies to continue to sustain the partnership both for their own benefit and for the benefit of Lagos and Nigeria adding, “It is a partnership which must be fired with great commitment and passion to the growth and prosperity of the stakeholders, especially the children who will be fed with the nutrition that is produced here”.

To the workers of the company, the Governor advised, “I must join Mr. Moloney in reinforcing the essence of this partnership. This is as much your business as it is theirs. This is a partnership in your interest as it is in their interest. As you work in this complex, it is also possible that your children can rise from this place to lead companies like this in future”.

Pledging that his administration will rebuild the road leading from Mile 12, in Kosofe Local Government Area of the State, to Ikorodu, Governor Fashola stated, “We are not unmindful of the status of the road from Mile 12 to Ikorodu and recently, we sent a team to evaluate what the status of the road is and it is clear to us that the road will not take any half-measures. The road has to be rebuilt and we have already started”

The Governor, however, pointed out that in the last two years, the road has been subjected to an unanticipated pressure due to diversions necessitated by the worsening state of the Lagos – Ibadan Expressway adding that the pressure has helped, in no small way, to deteriorate the road.

“But we will work with you and the leadership in Ikorodu and in the fullness of time, we will give you a more reliable and more enduring road” the Governor promised.

Thanking the management of the company for inviting him to the occasion, Governor Fashola declared, “As you continue to invest in our economy, you keep our people employed even as many big economies all over the world are shedding jobs”, citing the United States of America which, just last month, shed over 2, 000 jobs.

“If Lagos and Nigeria are creating jobs while big economies around the world are shedding jobs, it means that the solution to the global crisis lies in Africa”, the Governor said.

In his remarks, the Minister of Commerce and Industry, Chief Achike Udenwa, thanked Messrs PZ Cussons and Glanbia for finding it worth their while to come and invest in Nigeria pointing out that if the two companies could invest at a time when some companies are said to be leaving the country, it demonstrates their confidence in the nation’s economy.

He declared, “I want to assure you that Nigeria is still an investor’s haven no matter how you see it; no matter the daunting problems that we have, I am telling you that Nigeria is still the preferred destination for investors”.

Congratulating the companies for investing more than N7 billion into the nation’s economy in less than one month, the Minister pledged that the Federal Government was doing everything to create a conducive environment for the investors by tackling those challenges that make production difficult such as power, adding that the Government is still committed to providing 6, 000 megawatts of electricity before the end of this year.

Earlier in his welcome address, Chairman of Nutricima Limited, Chief Kola Jamodu debunked reports that PZ was preparing to leave Nigeria, pointing out that having stayed in Nigeria for more than 100 years, “PZ is here to stay”.

He disclosed that Nutricima is a joint venture between PZ Cussons International, Manchester UK and Glanbia of Ireland, which, according to him, invested a total of N3.4 billion into the company, adding that the whole investment was funded from abroad.

Also present at the occasion were the Chief Executive Officers (CEOs) of both PZ International, Manchester, UK and Glanbia of Ireland, Mr. John Moloney and Dr. Alex Kanellis respectively, the Oba of Lagos, HRM Oba Riliwanu Akiolu 1, the Ayangburen of Ikorodu, the House of Representative member for Ikorodu, Mrs. Abike Dabiri-Erewa, other traditional chiefs and top government functionaries.