The Nigeria Employers Consultative Association (NECA) has described the economic challenges facing the country as multi-faceted and called for a holistic and multi-pronged approach to solving them.
The Managing Director of NECA, Wale Oyerinde, in a statement on Sunday in Lagos, said there was no better time for the Federal Government to review current economic policies and deepen its engagement with the organized private sector.
”The nation currently faces multiple challenges: an ominous combination of spiraling inflation; the increase in the cost of energy; shortage of foreign exchange (FOREX); the declining value of the naira and an almost comatose aviation sector.
”Also, stuttering of the educational system; the increase in debt; the depletion of the foreign reserve and the increase in fuel subsidy expenses, among others, threaten to expose the country’s economy.
“While the government’s effort to save the economy is laudable, there is, however, the need for a more holistic approach to resuscitate the stuttering economy,” he said.
The CEO noted that Nigeria had always lived perilously on the precipice, with a large portion of its revenue dependent on the complexities of global crude oil supply and demand.
According to him, a dangerous mix of self-destructive tendencies, insecurity and fiscal and monetary policy inconsistencies have also conspired to worsen the situation.
“In April 2022, the World Bank warned that rising fuel subsidy costs could significantly impact public finances and raise debt sustainability issues – unfortunately, this projection is almost happening.
”The fiscal performance report recently released by the government confirmed the accuracy of these projections.
“The combination of a struggling aviation sector and highways occupied by bandits have also conspired to fuel the situation, causing inflation to rise to 18.6%, according to the Office for National Statistics.
“These have continued to worsen trade promotion and increase the rate of deindustrialization of some regions of the country,” he said.
Oyerinde therefore called for the initiation of a deliberate and influential approach to economic priorities and extensive consultation with stakeholders.
This, according to him, should be with the aim of collecting alternative policy options to revitalize all sectors of the economy.
”While the challenges of the revenue shortfall are acknowledged, burdening businesses with new taxes or levies will be counterproductive and self-defeating.
”Overloading companies that are already burdened will only lead to the closure of businesses and an escalation of job losses with a consequential effect on our social and economic stability.
“In the short term, government should widen the tax net, reduce waste in governance and focus on economic projects that will stimulate the Nigerian economy and ensure an enabling environment for businesses to operate.
“An enabling environment for local businesses will create the platform for new foreign direct investments, which could increase foreign exchange inflows into the country,” he said.
The director-general also urged the government, as a matter of urgency, to fix the four national refineries and encourage the development of modular ones as a precursor to the total elimination of fuel subsidies.
He said that interventions aimed at improving living standards to stimulate consumption and business sustainability should be implemented to promote job creation.
Oyerinde said: “As long as foreign exchange shortages persist, priority should be given to the allocation of available foreign exchange to manufacturing and other productive sectors of the economy.”