PRESS RELEASE

NECA COUNSELS GOVERNMENT ON REVIVAL OF THE ECONOMY

The Nigeria Employers’ Consultative Association (NECA) has commended government’s initiative and efforts to revamp the country’s economy and stimulate growth, in the face of the global economic downturn. The Association specifically applauded the Federal Government’s courage in embracing the policy of deregulation of petroleum products,  renewed interest in revamping the rail system, guided liberalisation of the foreign exchange market, etc. which, in due time, would impact positively on the economy both in the short and long term. It therefore pleaded with Nigerians to be patient with the government.

Speaking in Lagos, the Director General of NECA, Mr. Olusegun Oshinowo however noted that: “much still needed to be done to rescue the economy from the doldrums in view of the damning effect of the recessed economy, which included: declined capacity utilisation, closure of businesses, high unemployment , unfair competition from smuggled products , import restrictions, trade credit evaporation (S&P, Moody and Fitch cuts Nigeria’s ratings / outlook to negative, rating remains at B+), shrinking supplier credit and bills for collection, cold feet by export credit agencies to grant more credit. These, according to Oshinowo, should be addressed urgently to promote recovery.

In order to get the economy back on track, Mr. Oshinowo maintained that “Government must first accept the basic principle and imperative of prudent spending as a way out of recession. Such spending should target key social and physical infrastructural development; the settlement of the huge domestic debt and institution of an outcome -based and cash- backed budgetary system for the MDAs”. He further stressed the need for government to complement its monetary policy with appropriate fiscal policy such as the abrogation of arbitrary tax waivers/exemptions, deliberate increase of fiscal savings into the Sovereign wealth fund, improved tax collection with emphasis on widening the tax net as against introduction of new taxes or increase in VAT, which could further reduce disposable income, slow down growth and lead to disincentive for investment.

On Government’s drive to diversify Nigeria’s economy from its over-dependence on crude oil, NECA would want the Buhari Administration, in addition to its focus on agriculture, to take advantage of valuable linkages between oil and related industries through the development of energy-intensive industries and those that use by-product derived from oil such as petrochemicals, aluminium, steel production, fertiliser and bio electronics. NECA also urged Government to consider a resort to private capital mechanisms across sectors such as power, oil and gas, transport and other critical infrastructure to bridge the fiscal gap.

The NECA Director General further advised Government on the need to “give practical effect to the campaign on patronage of ‘Made in Nigeria’ products through coordinated efforts on local content development and leadership-by-example by ensuring that the MDAs and all other arms of government patronise only Made in Nigeria goods”. He enthused further that; “since all hands must be on deck to make a success of the resuscitation of the economy, there is the need for constructive and regular dialogue by government with representative organisations of the private sector (NECA, MAN, NACCIMA, NASME and NASSI) rather than individual Businessmen who, unfortunately, do not represent the collective interest of the private sector but individual businesses”.

He suggested “the urgency to restructure Nigeria with the prime objective of devolution of more governance responsibilities to the state and allowing some measures of resource control by the federating units so that they can take full responsibility for the security and welfare of their residents”.