NECA

The Nigeria Employers’ Consultative Association (NECA) has urged Federal Government to save Nigeria’s fragile economy from further crashing with its multi-faceted problems including petrol scarcity and currency redesign challenge.

NECA’s Director-General, Mr Adewale-Smatt Oyerinde, made the call in a statement on Sunday in Lagos.

Oyerinde also urged government to urgently ensure availability of the new Naira notes, and to prosecute saboteurs of the policy.

He said that such action would ease the frustration of Nigerians and avert the impending breakdown of law and order.

He said that one worrisome and distinctive feature of recent economic policies remained their poor implementation.

“The country is not short of good policies, but implementation by relevant authorities remained a challenge; while the naira redesign is commendable, the implementation so far is short of commendable.

‘’A policy purportedly designed to curb inflation, encourage the cashless culture and foster financial inclusion among others is inadvertently pushing many Nigerians into frustration.

‘’This is in view of the current epileptic Bank transfers and inefficient e-payment systems, and general inadequacy of online banking infrastructure.

‘’The current situation portends grave danger for the economy, because Nigerians have no access to the new notes, businesses are short of sales and most employees find it difficult to go to work because of lack of cash.

‘’It is apt to conclude that it could be counter-productive to seek to implement a cashless economy abruptly, when at the same time the new Naira notes are being rolled out in limited quantities within an impracticably short timeframe”, he said.

The director-general said that due to rising inflation and real reduction in citizens’ purchasing power, the nation could be witnessing financial losses in many Small and Medium Scale businesses and also shutting down of many large businesses.

He lamented that as Nigerians grappled with scarcity of cash, they were at the same time confronted with high cost of Petrol, a product for which trillions of naira is expended as subsidy.

According to him, businesses also continue to face increasing energy cost, inadequate Foreign Exchange rates, and high operating costs among others.

He said that financial experts have confirmed that contrary to CBN’s view, Nigeria does not have excessive cash in circulation, noting that the cash is less than two per cent of Gross Domestic Product.

‘’The latest report by the Central Bank of Nigeria actually shows that currency in circulation is only N 3 trillion out of N 52 trillion aggregate money supply.

‘’If the monetary policy is not working as we have seen overtime, it is not because of the N 3 trillion out of N 52 trillion, which is less than six per cent; and making our currency scarce only increases the incentive for counterfeiting.

‘’Also, more immediate and drastic action should be taken to ensure adequate supply of petroleum products to cushion the harsh effects of current scarcity”, he said.

Oyerinde said that making Nigerians spend hours on queue for a product that the nation is naturally blessed with, which is also subsidised is not only contradictory, but also shameful.

The Nigeria Employers’ Consultative Association (NECA) has expressed the need for Federal Government, especially the incoming one, to demonstrate political will by implementing policies that would drive the economy back on growth trajectory.

In a statement on Wednesday in Lagos, NECA’s Director-General, Mr Adewale-Smatt Oyerinde, also called on all hands to be on deck to rescue the economy from near collapse as the current government winds up its activities.

Oyerinde said that deliberate efforts must be made to reverse some of the current policies and implement new ones.

‘’All leakages associated with government revenue must be blocked including oil theft, skewed concessions, fuel subsidy, among others; a wholesome review of the tax administration to make it more equitable and investor-friendly should be initiated.

‘’While governments in other climes are either reducing tax rates in order to enhance economic activities, promote sustainable consumption and attract investors, Nigeria cannot continue to over-tax its businesses and citizens.

‘’With over 50 different taxes, levies and fees and company Income tax hovering around 35 per cent, raising taxes in order to increase revenue will be counterproductive.

‘’As the nation nears the mark of N77 trillion in debt with negligible impact on infrastructural development, the incoming government must develop strategies to diversify the revenue base through the revival of the country’s lagging non-oil sectors, ‘’ he said.

The NECA boss said that returning the economy to the path of sustainable growth would demand that certain fundamentals must be got right.

According to him, without these fundamentals, the economy will continue in circles.

‘’Among these fundamentals are a stable and highly predictable revenue streams; growth-focused monetary and fiscal policies.

‘’Others are a secure and business-friendly environment, and a legal, regulatory and legislative system that promotes equity, justice and enables enterprise competitiveness.

‘’These fundamentals are currently either lacking or are highly compromised, ‘’ he said.

He appreciated the concern of the Academic Staff Union of Universities (ASUU) on the need to increase tertiary education funding.

He, however, described ASUU’s call for the increase of the Tertiary Education Trust Fund (TETFUND) from the current 2.5 per cent to 10 per cent as unfortunate and undesirable.

‘’We should not kill a sector to feed another as businesses are overburdened with taxes already; making the country’s taxes one of the highest in the world.

‘’At this point in time, we need to analyse the effectiveness of the TETFUND over the period before providing a knee-jack solution.

‘’We are of the view that there is need to design a long-term funding mechanism for tertiary education and contributors to the fund must be assigned to supervise its spending, ‘’ Oyerinde said.

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 toward resolving them.

NECA’s Director-General, Mr Wale Oyerinde, in a statement on Sunday in Lagos, said there was no better time for the Federal Government to reappraise current economic policies and deepen its engagement with the organised private sector.

‘’The nation is currently faced with multiple challenges: with dire combination of spiraling inflation; rising energy cost; scarcity of foreign exchange (FOREX); dwindling value of the naira and an almost comatose aviation sector.

‘’Also, stuttering education system; rising debt; depleting Foreign Reserve and rising fuel subsidy expenses among others, which threaten to lay bare the country’s economy.

‘’While government’s effort to salvage the economy is commendable, there is, however, need for a more holistic approach to resuscitate the stuttering economy, ‘’ he said.

The director-general noted that Nigeria had always lived dangerously on the precipice, with a major chunk of its revenue dependent on the complexities of global crude demand and supply.

According to him, a dangerous blend of self-destructive tendencies, insecurity and fiscal and monetary policy inconsistencies have also conspired to make the situation worse.

“In April 2022, the World Bank warned that the rising cost of fuel subsidy could significantly impact public finance and pose debt sustainability concerns: alas, this projection is almost happening.

‘’The fiscal performance report released recently by the government confirmed the accuracy of these projections.

‘’The combination of a struggling aviation sector and roads taken over by bandits have also conspired to fuel the situation, leading to rising inflation at 18.6 per cent, according to the National Bureau Statistics.

‘’These have continued to worsen the promotion of commerce and the increase the rate of de-industrialisation of some regions of the country,” he said.

Oyerinde, therefore, called for the commencement of a deliberate and economic-priority- influenced approach and wide consultation with stakeholders.

This, according to him, should be with the view of harvesting alternative policy options to re-energise all sectors of the economy.

‘’While the challenges of revenue shortage are acknowledged, burdening businesses with new taxes or levies will be counter-productive and a self-destructive action.

‘’Over-burdening already burdened businesses will only lead to business closure and an escalation of job losses with consequential effect on our social and economic stability.

‘’Government should, in the short-term widen the tax net, reduce wastage in governance, and focus on economic projects that will stimulate the Nigerian economy and guarantee an enabling environment for businesses to operate.

‘’An enabling environment for local businesses will create the platform for new foreign direct investment, which could increase foreign exchange inflow into the country,” he said.

The director-general also urged the government, as a matter of urgency, fix the four national refineries and encourage the development of modular ones as a precursor to total removal of fuel subsidy.

He said that interventions aimed at improving living standards to stimulate consumption and enterprise sustainability to promote job creation should be implemented.

Oyerinde said, ‘’While forex scarcity persists, allocation of the available forex to manufacturing and other productive sectors of the economy should be given priority. ‘’