By Bimbola Oyesola
The Nigeria Employers’ Consultative Association (NECA) has tasked the Federal Government to close rank with members of the organised private sector (OPS) for urgent solutions to the ailing economy.
This is even as it urged the government to reappraise its monetary and fiscal policies to address the multifaceted challenges confronting the nation.
Director-general, NECA, Mr. Wale-Smatt Oyerinde, speaking in Abuja recently, noted that, rather than holding on to and promoting policies that have proven not to be effective within the context of current challenges, government would do well to reappraise monetary and fiscal policies to gauge their effectiveness and long-term relevance.
According to him, a deliberate and transparent process of evaluating economic policies should be put in place, with the OPS, who are critical stakeholders, at the centre.
While noting the various interventions by the Central Bank of Nigeria (CBN), the new NECA DG said that the deployed initiatives have the capacity to stimulate and drive the economy towards the path of sustained growth if the impediments are removed.
He stated that those government initiatives and policies, begging for reappraisal comprise the exclusion and prohibition of about 47 items from eligibility to access FX on June 23, 2015, and the introduction of the e-Form ‘A’ for Forex Online in July 2021.
“Unfortunately, many of these interventions have not yielded the desired outcomes: enriching the flow of FX, reflating the economy and promoting enterprise competitiveness,” Oyerinde said.
In view of the significant impact of the misalignment of the Fiscal and Monetary Policies of government, the NECA DG opined that it is urgent and important for the nation’s Monetary and Fiscal Authorities to close ranks to reduce the contradictory tendencies of their policies for the good of the nation.
Citing examples, he pointed out that, while the monetary policies aim to reflate the economy through various interventions, the fiscal policies tend to stifle the productive sector by frequently introducing new taxes and levies.
The examples, he said include the recent telecommunication Excise Tax, Excise Duty on carbonated drinks, Beverage’s tax and the NYSC Levy.
He said, “The introduction of these taxes and levies are an unfortunate addition to other anti-enterprise regulations. The multiplier effects of these will further hamper the purchasing power of the citizens, reduce capacity utilization of enterprises and worsen the macroeconomic indices in the country.”
He however recommended that the process should involve the Organized Private Sector of Nigeria (OPSN) in order to enhance its credibility and effectiveness, while strict monitoring and enforcement should be ensured.
He stated, “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 FOREX inflow into the country.”
However in the medium, the new NECA boss called on the Federal Government to 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 added, “With over N5 trillion budgeted for subsidy payment in 2022, an amount larger than the budget for education and agriculture, this is unrealistic and unsustainable. Economic interventions aimed at improving living standards (to stimulate consumption) and Enterprise sustainability (to promote job creation) should be implemented. While FOREX scarcity persists, allocation of the available FOREX to manufacturing and other productive sectors of the economy should be given priority.”