From Isaac Anumihe, Abuja
Nigeria Economic Summit Group (NESG), yesterday, warned that the political manipulations of 2022, may relegate focus on the economy and lead to the stagnation of the nation’s economic recovery.
Speaking at the launch of the NESG 2022 Macroeconomic Outlook Report, Chairman of NESG, Asue Ighodalo noted that the distractions will likely have the effect of amplifying the challenges experienced in 2021 if the government does not immediately move to stem the tide by implementing critical reforms.
According to him, the policies that directly impact the welfare of citizens and the performance, sustainability and job-creating potentials of businesses, in the short term, must be at the fore of government’s policies and actions in 2022.
The chairman also noted that the research department of NESG, working with other panels of economists, produces an Outlook Report that reviews the macroeconomic status of the country in the previous year, noting that the recent outlook provides an overview for the new year and suggests reform and policy recommendations geared at improving the nation’s macroeconomic climate; creating an enabling environment and catalysing inclusive growth.
“Election-related distractions will likely have the effect of amplifying the challenges experienced in 2021 if the government does not immediately move to stem the tide by implementing critical reforms.
“We believe that policies that directly impact the welfare, gainful employment and safety of our citizens and the performance, sustainability and job-creating potentials of our businesses, in the short term, must be at the fore of government policies and actions in 2022.
“Being a pre-election year, 2022 will likely come with its peculiarities. First, increased election spending could motivate a tighter monetary policy stance to curb inflationary pressures.
“Second, attention may shift from effective governance to outright politicking. The pace of decision-making usually slows down in a pre-election year and reform pronouncements and implementation become difficult.
“Third, the philosophical and political battles which will ensue as each party seeks to choose its presidential candidate and then convince the citizens that they are the party that will form the best government, may relegate focus on the economy and lead to the stagnation of our recovery.
“Each year, we tailor our recommendations to what we believe is in our country’s best interests – confident in the underlying analysis, and humbly assured that the consideration, acceptance and diligent implementation of some of these recommendations will yield a more stable and stronger macroeconomic environment” he said.
Ighodalo explained that year 2021 marked the gradual recovery of the global economy from the negative impact of COVID-19 pandemic, notwithstanding the emergence of multiple virus variants, adding that the recovery was largely attributable to determined and focused global vaccination campaigns and rollouts, despite the significant disparities across continents.
“In Africa, only about 15 per cent of the population have been vaccinated with 10 per cent fully vaccinated compared with the rates seen in the West (with 51 per cent fully vaccinated in Europe and 62 per cent in the United States) as of January 17, 2022.
“With our government’s effective management of the pandemic, fiscal boosters and the public/private sector response to COVID-19, the economy recovered by 0.5 per cent, 5 per cent, and 4 per cent in the first three quarters of 2021, despite our low vaccination rate.
“However, our peculiar economic commodities gravely threaten a full economic rebound.
“We continue to grapple with multiple macroeconomic challenges, exchange rate volatility, fiscal constraints, market distortions, high inflation, an unattractive investment environment (with security concerns at the core of investor reticence) as well as infrastructure deficits.
“The abatement of these impediments must be addressed with a sense of urgency, and the implementation of immediate economic reforms must be prioritised to promote higher productivity, achieve economic efficiency, and deepen inclusive development.
“The World Bank estimates that an additional one million people were pushed into poverty in Nigeria between June and November 2021, resulting in a total of about 8 million people being relinquished to poverty in 2021 and bringing our nation’s poverty headcount to about 91 million.
“That is 91 million Nigerians afflicted by the ‘poverty virus’, which is every bit as deadly and more infectious than SARS COVID-19, judging by the numbers.
“In parallel with the persistent uncertainty and economic volatility that COVID-19 continues to unleash as new strains emerge, infection rates ebb and flow into 2022.
“Our recommendation, therefore, is that swift action is taken, preferably in the first quarter of this year.
“As campaigns begin to kick off for the general elections in 2023, we must pay very careful attention to the candidates that the political parties present.
“We, the people of Nigeria, must carefully consider the capacities, track record and love of the country demonstrated by each of these candidates.
“Long-standing issues such as effective deregulation of the downstream oil and gas sector, foreign exchange scarcity and pricing, export promotion, enhanced revenue generation without dampening entrepreneurial drive; acceleration of economic diversification and patient quality investment into priority sectors such as agriculture, manufacturing, social (education and health), trade and information technology sectors, must be given the utmost attention in 2022.
“These issues, if properly dealt with, have immense capacity to propel economic growth, enable employment, reduce poverty, and start us on a new path to sustained development.
“This year’s NESG Macroeconomic Outlook is themed: “The Last Mile: Reforms towards Significant Improvement in National Economic Outcomes”he stated.
In his remarks, NESG’s Chief Executive Officer, Laoye Jaiyeola argued that Nigeria cannot afford subsidy payments. He urged the government to map out ways of catering for over 40 million Nigerians who consume just 3 per cent of petroleum products insisting that government should liberalise oil and gas sector to be very competitive. Resources of subsidies, he advised, must be efficiently and judiciously spent.
He called for transparency and strengthening the framework of the oil and gas sector to ensure that host communities work with investors in order for the country to produce Organisation of Petroleum Exporting Countries (OPEC) benchmark.