By Merit Ibe, [email protected]
Nigeria’s organised private sector have expressed optimism that the incoming government will do its utmost part to create a conducive environment for sustainable entrepreneurship for the growth and success of the sector.
The expectation of the operators is obviously tied to the electorate picking effective leadership in the 2023 election.
The stakeholders were also hopeful that the new government would tackle the menace of fuel subsidy, oil theft, power issue, forex challenge, weak naira, security challenges and others which will define the trajectory of Nigeria’s revival from 2023.
The call come as manufacturers in the country continued to cry out over the harsh operating environment, hoping that things would get better.
Nigeria’s path to economic growth and sustainable development has been hobbled by inadequate resolution of the numerous challenges facing manufacturers who are the propellers of its long-term economic agenda. Achieving a stable rapidly-growing economy would require taking head-on the daily bottlenecks confronted by business owners within the manufacturing sector.
Top among these challenges are, forex scarcity, multiple taxation, exorbitant interest rate, high-cost business operating environment, smuggling, insecurity, energy crisis and epileptic power supply.
To restore the sector to an enviable position in the global business environment and in turn propel an inclusive growth of the economy this year, MAN is hoping that the government will committedly facilitate the formal service sector to widen tax net and avoid multiple imposition of tax on the manufacturing companies; This is in addition to tackling insecurity and smuggling by upscaling capacity building and providing adequate security equipment and technology for surveillance and intelligence gathering.
The trade group also expects the incoming government to continue to involve all stakeholders to play a vital role in supporting security along the oil infrastructure while also ensuring they are beneficiaries of the awarded surveillance contract.
Ahead of its coming onboard, MAN urged the new government to prepare to deploy means of reducing unemployment and boost productivity of manufacturing by encouraging local sourcing of raw material, improving infrastructural development, resolving all credit and forex-related challenges, ensuring implementation of the Executive Order 003 and imposing cost-reflective electricity tariff and energy prices.
It urged to jettison the failing hard peg policy and establish a clear and transparent market framework to guide the interventions of the CBN in the forex market.
Other recommendations include, synergistic alignment of monetary and fiscal policies while also curbing fiscal deficits with the gradual removal of fuel subsidy backed with appropriate palliatives for the poor.
The manufacturers umbrella group called on the government to tackle flood disaster by adopting erosion control mechanisms, early warning and emergency services as well as flood risk assessment and ecological funds
This is in addition to the upscaling of electricity generation and building super grids that are regionalised to avoid continuous national system collapse and ensure a more robust transmission infrastructure.
Furthermore the group advocated the reduction of the country’s reliance on imported finished products and raw materials by encouraging local sourcing through a comprehensive and integrated incentivised system since Nigeria is largely bearing the brunt of imported inflation.
Commenting on some of these recommendations, Frank Onyebu, Chairman, MAN, Apapa branch, argued that the real sector is thus hanging onto a glimmer of hope that genuine leaders will emerge from the 2023 election and turn things around.
“Unfortunately 2023 may go the way of the previous years unless the election produces leaders who are genuinely interested in turning things around. The real sector of the economy is thus hanging onto a glimmer of hope that genuine leaders will emerge from the 2023 elections. The sector is hoping for leaders who will do their utmost to create a conducive environment for sustainable entrepreneurship.”
In as much as they want government to address Foreign Exchange, policy management, infrastructure in the area of power, road and the security situation for ease of doing business chain to be restored, they believe that the new leadership will put things in place.
Director, Centre for the Promotion of Private Enterprises (CPPE), Dr Muda Yusuf, is of the view that the political environment has a major impact on economic and business performance, noting that the quality of the political transition process, especially the credibility of the 2023 elections would be of contextual significance for the economy in 2023.
“The elections must be free, fair, transparent and credible. This underlines the need for the independence, neutrality and credibility of the key institutions involved in the election management process – INEC, Judiciary and the Security agencies.
“The quality of the democratic transition and choices would significantly impact economic outcomes in 2023.”
Yusuf emphasised the need for an urgent review of the tax regime. The current tax regime he said is in conflict with the National Tax Policy which prescribes that there should be less emphasis on direct taxation in order to incentivise investment.
Against the backdrop of the challenges faced by investors in the foreign exchange market, he proffered an urgent review of the current foreign exchange policy regime, calling for a flexible exchange rate policy regime.
He added that “the Nigerian economy has the capacity to weather the current turmoil if the policy contexts are right. The country has the market, the people and natural resources. The opportunities that the present situation offers will only be realised if policy obstructions to resource flows are removed.”
For Chairman, LCCI SMEs Group, Daniel Dickson-Okezie, expectation for every sector of the economy is obviously tied to the effective leadership in 2023 election.
“How the new government deals with fuel subsidy, oil theft power issue, scarcity and weak naira, security challenges and others, will define the trajectory of Nigeria’s revival in 2023.
However, said growth will drop averagely between late 2022 and early 2023 due to persistent low oil production and rising insecurity.
“Inflation is expected to rise as high as 29 per cent in the first quarter of 2023 having crossed 20 per cent since October 2022. The rise will be driven by rising food, diesel and gas prices.
Oil exports are expected to increase slightly as a result of expected stepping up of activities aimed at stemming the scourge of petroleum theft with election of the right government, gradual restoration of the right policies is expected in most sectors of the economy as a result of investors confidence.
Real sector growth will be slow but sustained overtime.
This off course will depend on deliberate and conscious investment in infrastructure and a substantial drop in the outrageous interest rate regime which we have presently.
It will also depend on the incoming government’s elimination of heavy burden of wastage as well as a renewed and conscious efforts to address the albatross of debt servicing.
President, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Ide Udeagbala, called on the Federal and state governments to urgently prioritise the need to revitalise the industrial sector for more inclusive economic growth. He suggested that government at the Federal and states levels should create and maintain enabling environment that is investment friendly as this will entail enunciating and maintaining policies that remove bottlenecks to business investments. Udeagbala insisted on government addressing various factors that are capable of increasing cost of doing business in Nigeria, saying these are critical issues which if addressed urgently will help position the economy for foreign direct investment and encourage local investors into establishing industries that will enhance jobs creation and improved GDP in 2023.