Business and Economic Environment in Lagos | Analysis

agate line and Economic Environment in Lagos Analysis1.0INTRODUCTION progressicraft is seen to operate within an purlieu. This environment could either present a threat or an opportunity to the organizations that operate in it. This essay aims to describe the line of reasoning environment in the metropolis where the researcher lives. The first section allow give an overview of what business environment is all about. Further more, Lagos deposit go away be utilise as a subject study to examine the business environment where the researcher lives. Then, different forces or conditions that encourage or inhibit business activities in Lagos state go forth be discussed2.0AN OVERVIEW OF BUSINESS ENVIRONMENTAccording to Nyandat (2013) Business environment can be be as forces or surroundings that affect business operations. These forces may let in customers, competitors, suppliers, distributors, industry trends, substitutes, regulations, judicature activities, and parsimoniousn ess, social, political and cultural factors.Ogunro (2014) explained business environment as the combi area of all environmental conditions and influences that are capable of bear upon or influencing business activities. Furthermore, Obiwuru et al (2011) also defined environment of business as the aggregation of the manikin of all the external and internal conditions and influences that affects the existence, growth and maturement of the business.For the purpose of this essay, Lagos state in Nigeria will be employ as a case study to analyze the business environment in the city where the researcher resides.Lagos state is the former capital of Africas largest country, Nigeria it is the most populated city in sub-Saharan region with more than 15 million people. Lagos is called centre of attention of excellence because of its re gravelation of housing the in truth best of Nigerias skilled workforce. It is also home to the countrys top industries and businesses with over 65% of impor t goods passing through its ports and 80% of manufacturing world handled within or around its vicinity. With such massive stinting facts, Lagos is the life-wire of the Nigerian economy. This is best explained by the fact that no macro- frugal activity can ever succeed with Lagos being alienated.There are forces or conditions that encourage or inhibit business activity in Lagos and these include2.1Human CapitalThe population of Lagos is a very good advantage for business entrepreneurs because both skilled and unskilled workforce is available and very cheap. Lagos state has a population of more than 15 million people of which 75% of them are youths and eager to work in order to earn a living. The city has the best of skilled workforce from diverse regions including foreign experts. This has helped the business activity because you can get any expert you want at a very affordable price.2. 2 Inadequate Power Supply Inadequate power supply is one of the major scraps that affect the business activity in Lagos. either company has a standby power generator which is being used when there is power failure .Firms expenditure on diesel and petrol (as the case may be) is unbearable and this is affecting the productivity. This development is impacting negatively on the business investment due to increased expenditure on diesel and petrol by enterprises. This also comes with the consequences of declining productivity and competitiveness. Many companies chip in been closed down due to inadequate power supply term some companies where forced to relocate to the close country.Nigeria has lost very huge amount of money due to inadequate power. In 1990, the World Bank estimated the economic loss to the country from power inefficiency, at about N1 billion (Adenikinju, 2005, p.3).Using telecom industry in Nigeria as an example which is an Oligopolistic market where we have very few telecom industries their major challenge is power which they use to power all the base move across the country. Most of them spend an outrageous amount of money to power these base stations because they cannot afford to have network failure due to power outage. Telecom Operators Spend N10 Billion Annually to Power BTS (Nurudeen, 2014, p.1)2.3Security SituationInsecurity is other major concern that affects businesses in Lagos, there is very high rate of insecurity in the city and this made some foreign investors to decline from put in the country. The security agencies are trying to ensure a secure and peaceful society but the government still needs to do more in order to give the foreign investors courage to come in and invest. Using Oil and Gas area as an example, where we have Oligopolistic market expression and the price is being falsifyled and regulated by the government, there is a lot of oil theft and pipeline vandalism in the downstream firmament which affects the economy.The up-to-the-minute estimates by the Finance Minister, Dr Mrs. Ngozi Okonjo-Iweala put the oil theft at about 400,000 barrels per day the environment of the affected communities also suffers serious degradation as a consequence of this problem. (Ibru, 2014, p.2)2.4 Poor InfrastructuresLack of good infrastructure in the city is another major challenge many companies have their industries regain at the industrial layout which is quite far from the metropolis. Commuters find it very difficult to access some remote places to buy products due to dreary roads. (Gilbert, 2009) Access to raw(a) materials for the company use is a major challenge also distribution of goods and services to the metropolis is also a big problem due to shitty roads. There is a lot of traffic congestion in the metropolis and valuable hours are being lost due to traffic which is caused by bad roads. There is no good health care sector for the poor masses, many people could not have access to medical care because of far-flung poverty in the country and this is causing very big negative impact to t he country due to high mortality rate.3.0 ConclusionThe economic environment in Lagos state has been facing a lot of challenges but despite all that, they were able to create jobs, wealth for individuals, as well as taxation enhancement for the government through interlocking and taxation.4.0 ReferencesAdenikinju, F. (2005) Analysis of the cost of infrastructure failures in a developing economy the case of the electricity sector in Nigeria. saturation 148 of AERC research paper, African Economic Research Consortium.Gilbert, C. (2009). Nigerias Bad Roads Are Getting Worse. Available http//www.voanews.com/content/nigerias-bad-roads-are-getting-worse-74805987/415952.html. Accessed quaternary June 2014Ibru, G. (2013) Press conference on the economy by the Lagos chamber of commerce and industry. 2nd Quarter Online Available from Accessed 27th May 2014.Neyandat, C. (2013) how do you analyze the business environment? Gakus, 21st Oct. Available from http//www.gaksu.com/allpdf/140_notes. pdf Accessed 4th June 2014Nurudeen, A. (2014) Interview with the C.E.O of Airtel Nigeria, Daily Trust, Online 10th February.p.1. Available from http//allafrica.com/stories/201402100424.html?viewall=1 Accessed 28th May 2014Obiwuru T. Oluwalaiye, B. Okwu, T. (2011) External and Internal Environments of Businesses in Nigeria An Appraisal in International Bulletin of Business Administration (12)OGUNRO, O. (2014).International Journal of Academic Research in Business and Social Sciences. 4th ed. Rufus Giwa Polythecnic, Owo, Ondo state, Nigeria HR Mars. Question 21.0 INRODUCTIONMacroeconomics can be defined as study of economics that is more concerned with government structures, behavior and decision making which affects the country as a whole. It deals more with the countrys economy which includes gross domestic product (GDP), unemployment rate, price indices, exchange rate, Inflation. When a country is experiencing macroeconomic perceptual constancy, it means that the countrys economy is very stable the tax income Domestic Product (GDP) is very good, unemployment is reduced to the minimal rate and low inflation. The aim of this essay is to examine the effectiveness of various approaches that may be used to reduce macroeconomic instability while exploring different policies which a countrys government could use to achieve macroeconomic goals2.0 AN OVERVIEW OF MACROECONOMICSMacroeconomics is concerned with government economic performance, it focuses on the economic trend of a nation. Macroeconomics deals with factors that that affect the countrys economy. Macroeconomic instability is major concern to any government and all potential measure must be taken to ensure that economic stability is maintained. Any country that suffers macroeconomic instability will possibly have a high rate of inflation, unemployment, low GDP or total recession. Different kinds of measure are taking by different countries to ensure that they maintained a stable economy. Below are some hig hlighted measures/policies which can be used to ensure that macroeconomic instability is reduced.2.1 PrivatizationPrivatization can be defined as a process by which some inefficient and ineffective sector is being transferred to be managed by more efficient secret sector for the benefit of economic growth. This will allow the government to perform its primary portions, that is administration of law and order thereby leaving the actual running of business enterprise to backstage sectors.Nwoye (2012) defined privatization as the transfer of ownership and control of enterprise from state to the private sector.The main reason why government privatize the worldly concern sector is because of economic stability and this could be explained belowTo enhance efficiency in the public sector there are so many inefficiency in public sector due to nonchalant attitude of the workers. Most of the public servants believe that government are for the people, so they can do whatever they want witho ut being fired and this affect the governments economy, there are so many ghost workers being paid by the government which affects the expenditure. But when handed over to private sector, they become more efficient and generate more revenue for the government because the private sector cannot afford to lose money like the government, they will trim down down the cost overhead to the barest minimum to be able to generate revenue which will help in the economic growth of the country.To decontrol the economic system by reducing unnecessary administrative controls of the government deregulating the economic system helps the government to focus more on the administration of the nation by implementing law and order and good policies that will help in the economic growth. The government handing over the business management to the private sector will reduce their cost overhead and also increase efficiency in the administration of the nation.To decrease the volume of un fat instruments in the public sector as mentioned earlier, there are a lot of unproductive people and instrument in the public sector, nepotism and godfathers has contributed to inefficiency in the public sector where round peg is been put in a square hole. But when these sectors are being privatized, all these unproductive people and instrument will be removed and replaced with more productive instrument which will increase the employment and delivering of the goods and services thereby generating sufficient revenue for the government.To fortify the role of the private sector in the economy which will warranty employment and higher capacity utilization Fortification of the role of the private sector in the economy is very important as this will help in decreasing the level of unemployment in the country and which helps in economic stability.Reduction of political fray in the public sector politicial interference in the public sector increases the rate of corruption which affects the economy, but wit hout the interference of the politicians when privatized, the sectors will be more productive with less corrupt practices.2.2 unrestricted head-to-head Partnership (PPP)Omoh (2012) confirmed that government across the globe have come to terms with the fact that public sector cannot provide the needed infrastructure and have come to the conclusion that private sector participation in the provision of infrastructure in inevitable. Public private partnership is where the government and private sector goes into partnership to bring economic growth through building and construction of infrastructures, managing them for a shot term or long term and finally hand them over to the government after a stipulated gunpoint as agreed. This partnership helps to increase the gross domestic product and it can be done is so many ways it could take the form of Build-Operate-Transfer (BOT), Build-Operate-Own (BOO), Build-Own-Operate-Transfer (BOOT), Design-Build-Operate-Transfer (DBOT), Design-Buil d-Finance and Operate (DBFO). Other less common ones are Build-Rent/Lease-Transfer (BRT or BLT) Build-Transfer and Operate (BTO). Omoh (2012)The Scope for the public private partnership ranges from Power generation plant and transmission, roads and bridges, ports, airports, railways, inland container depots and logistics hubs, gas and petroleum, water supply, housing, educational facilities (e.g. Schools, Universities) and healthcare facilities. This helps the government to spend less money on these areas while the partners will finance and manage these sectors for some time to recover their invested money.2.3 Fiscal PolicyHeakal (2013) defines fiscal form _or_ system of government as the means by which a government adjust its spending activity and tax rates in order to monitor and influence a nations economy.Heakal (2003) also confirms that fiscal policy is based on the renowned British economist, John Mynard Keynes, who is known as Keynesian economics his theory shows that govern ment can influence macroeconomic stability / productivity level by increasing or decreasing tax levels and public spending. This influence will in turn curb inflation, increase employment and maintain a healthy value of money.Gbosi (2008) says that fiscal policy entails the governments management of the economy through the controlling of its income and spending power in order to achieve certain desired macroeconomics objectives in which economic growth and stability is among them.Jhingan (2006) also acknowledges the power of fiscal policy as an instrument of macroeconomic stabilization.Iyeli Ijomah (2013) also established that if fiscal policy is used with circumspection and synchronized with other measures, it will possibly smoothen out business cycle which leads to economic growth and stability.Based on the above explanations, it could be said that Fiscal policy is a way or method the government is using to control economic goals in order to maintain stability in the nations econ omy. Fiscal policy can come as increase in taxation or government expenditure in order to influence aggregate demand (AD) and level of economic activity. AD can be defined as the total level of planned expenditure in an economy (AD= C+ I + G + X M) where C= Consumer spending, I= Investment, G= presidency Spending, X= export, M= Imports)The government might implement the fiscal policy in order to stimulate economic growth in a period of a recession, the government can also use fiscal policy to keep inflation low. Mainly, fiscal policy aims to stabilize economic growth in order to avoid boom and bust economic cycle.2.4 TaxationAnyanwu (1997) defined taxation as the positive transfer or payment from private individuals, institutions or groups to the government.Nzotta (2007) stated the four key issues that must be understood for taxation to play its function in the society first, a tax is a compulsory contribution made by citizens to the government and this contributions is for genera l common use. Secondly, a tax imposes a general obligation on the taxpayer. Thirdly, there is a presumption that the contribution to the public revenue made by taxpayer may not be equivalent to the benefits received. Finally, a tax is not imposed on a citizen by government because it has rendered specific services to him or his familyAnyanwu (1993) also pointed out that there are three basic objectives of taxation these are to raise revenue for the government, to regulate economic activities and to control income and employment.Nzotta (2007) also confirmed that taxes generally have allocation, distribution and stabilization functions.The allocation function of taxes talks about determination of the pattern of production, the goods that should be produced, who produces them, the distribution function of taxes relates to the manner in which the effective demand over economic goods is divided among the individuals in the society while the stabilization function of taxes deals with att aining high level of employment, a reasonable level of price stability and appropriate rate of economic growth, with allowances for effects on trade.ConclusionThe above listed methods/ policies has been used by so many countries to maintain economic stability and Nigeria as a country has introduced these policies which is now helping the government to stabilize the economy.ReferencesAnyanwu, J.C., 1993. Monetary political economy Theory, Policy and Institutions. Hybrid Publishers, OnitshaAnyanwu, J.C., 1997. Nigerian Public Finance. Joanne Educational Publishers, OnitshaGbosi, A.N (2008) Contemporary Macroeconomic problems and stabilization policies, Portharcourt, Automatic Ventures.Heakal. R. (2013) Investopedia. What is fiscal policy? Online Available rom http//www.investopedia.com/articles/04/051904.asp accessed 2nd June 2014.Iyeli I.I Ijomah M.A (2013) A Re-examination of fiscal policy applicability in Nigerias economic growth process An econometric policy evaluation from empir ical evidence. Vol 3. (4 July 2013) P.180 188Jhingan, M.L (2006) Macroeconomic Theory. New Delhi. Vrinda Publishers.Nwoye .I. 2013, Privatization of Public Enterprises in Nigeria The views and counterviews. Online Available from http//www.globalizacija.com/doc_en/e0062pri.htm Accessed 3rd June 2014Nzotta, S.M., 2007. Tax evasion problems in Nigeria A critique. Niger. Account. 40(2) 40-43Omoh G. (2012) Public Private Partnership The new way to infrastructural provision, Vanguard, Online 17th December. P.7. Available from www.vanguardngr.com/2012/12/public-private-partnershi-the-new-way-to-infrastructural-provision Accessed 30th May 2014