How to revive Nigeria’s economy, by NECA

Effort by the Federal Government to revamp the economy and stimulate growth in the face of the global economic downturn has been commended by the Nigeria Employers’ Consultative Association (NECA).

  The Association in a statement applauded the Federal Government’s courage in embracing the policy of deregulation of petroleum products,  renewed interest in revamping the rail system, guided liberalisation of the foreign exchange market, among others  “which, in due time, would impact positively on the economy both in the short and long term.

  The union has also appealed to Nigerians to be patient with the government.

The Director General of NECA, Mr. Olusegun Oshinowo, who according to the statement spoke in Lagos said:”Much still needed to be done to rescue the economy from the doldrums in view of the damning effect of the recessed economy, which included: declined capacity utilisation, closure of businesses, high unemployment, unfair competition from smuggled products, import restrictions, trade credit evaporation, among others.

 He said S&P and Fitch have  cuts Nigeria’s ratings / outlook to negative, adding that  “rating remains at B+), shrinking supplier credit and bills for collection, cold feet by export credit agencies to grant more credit”.

 The issues according to Oshinowo should be addressed urgently to promote recovery

 He said: “Government must first accept the basic principle and imperative of prudent spending as a way out of recession. Such spending should target key social and physical infrastructural development; the settlement of the huge domestic debt and institution of an outcome -based and cash- backed budgetary system for the MDAs”.

  He further stressed the need for government to complement its monetary policy with appropriate fiscal policy such as the abrogation of arbitrary tax waivers/exemptions, deliberate increase of fiscal savings into the Sovereign wealth fund, improved tax collection with emphasis on widening the tax net as against introduction of new taxes or increase in VAT, which could further reduce disposable income, slow down growth and lead to disincentive for investment.

On Government’s drive to diversify Nigeria’s economy from its over-dependence on crude oil, “NECA would want the Buhari Administration, in addition to its focus on agriculture, to take advantage of valuable linkages between oil and related industries through the development of energy-intensive industries and those that use by-product derived from oil such as petrochemicals, aluminium, steel production, fertiliser and bio electronics.

 NECA also urged Government to consider a resort to private capital mechanisms across sectors such as power, oil and gas, transport and other critical infrastructure to bridge the fiscal gap.

The NECA Director General  advised Government on the need to “give practical effect to the campaign on patronage of ‘Made in Nigeria’ products through coordinated efforts on local content development and leadership-by-example by ensuring that the MDAs and all other arms of government patronise only Made in Nigeria goods”.

 He said: “since all hands must be on deck to make a success of the resuscitation of the economy, there is the need for constructive and regular dialogue by government with representative organisations of the private sector (NECA, MAN, NACCIMA, NASME and NASSI) rather than individual Businessmen who, unfortunately, do not represent the collective interest of the private sector but individual businesses”.