Earlier reports indicated the federal government’s plan to stop paying subsidy by June. This was confirmed by the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, who revealed that the provision of N3.6 trillion had been budgeted to cover the subsidy payment of the first six months of the year. On this, the Director-General of Nigeria’s Employers Consultative Association, Wale Smart Oyerinde has urged the President-Elect to rather ensure the repair of refineries across the country before deciding to totally remove subsidies, so as to avoid further impoverishing the citizens.
Worried about the increasing unemployment rate in Nigeria which was now at a 33.3 percent high, the DG noted that in the global space, approximately 9 out of every 10 jobs were created by the private sector but with the capacity of the private sector being compromised by mostly governmental factors was worrisome. He indicated that the country’s GDP growth was proportionate to the level of organized businesses in the country. He lamented about the governmental agencies and how they stifle the capacity of private businesses to create employment. Even while the Ministry of Labour was complaining about the increased state of unemployment, other government agencies were wrecking private businesses. These contradictions, he said, is a major concern.
Fiscal & monetary policies contradictions creating problems for businesses.
Wale Smart, indicated that these contradictions were stemmed across many differing areas. One of these is the mode of regulation in the country. He explained that overtime, regulators were known to cross their regulatory thresholds for income generation which changes the dynamics of businesses. This case of contradictions within government was described rather as a source of worry. He criticized these agencies for setting bottlenecks when they should be enacting business-friendly regulations. The unaligned fiscal and monetary policies was also described as a major contradiction. The DG explained that as long as the fiscal situation continues to neutralize the monetary policy, problems will continue to be created for businesses. As such, investors will be looking to environments where their businesses can thrive.
With the World Bank ranking Nigeria as the 131st of 190 countries in ease of doing businesses globally, Wale Smart noted that businesses in the country needed input in the context of raw materials. He also noted that businesses should be granted access to forex. On the problems of forex, the DG explained that it was self-inflicted as a result of the oil theft perpetration. He explained that making the environment immensely friendly to help businesses thrive, provision of security and an improvement in the cost of living would all help businesses grow. On the issue of standardization, he stated that this was a problem across Africa, as most African countries continue to not add value to their exports like refining crude oil. The more forex was being sought after, the more damage it does to the Nigeria’s currency.
No inclusive growth in GDP despite contributions of ICT & Agric sector.
Despite Nigeria’s GDP growing by 3.52 percent, important economic indications such as unemployment, inflation and per capita income have remained on the negative curve and the DG asserted that this raised concerns about the veracity of growth. He stated that although sectors like ICT and agriculture had done immensely well in enhancing the economy, there was no inclusive growth. On taking advantage of the Free Trade Area Agreement, he noted that Nigeria must salvage the problems with its regulatory environment and enhance ease of doing business in the country. He also advised the incoming administration to first stabilize the macro-economy and solve the subsidy challenge. He said the refineries in the country must be fixed and subsidy subsequently removed.
The NECA’s DG explained that it was rather risky to further drag over 100 million Nigerians into multi-dimensional poverty due to the policy of halting subsidy before fixing the refineries. With inflation increasing and salary not rising, he explained that the purchasing power of most Nigerians was crumbling already. He also urged the incoming government to look into the rail sector and make it more productive. He further urged that the regulatory and legislative environment must be transformed to reflect a supportive environment. He criticized the naira redesign policy, noting that it was more of a political move without care for the economic implications.
Current administration urged to repair the refineries and stop borrowing.
On the outgoing administration, Wale Smart stated that despite all their efforts, they have failed to curb the inherent contradictions. He noted that it shouldn’t take eight years for any administration to solve the issue of oil theft and fuel subsidy. He criticized the administration for not fixing the refineries within the last 8 years and urged them to salvage the situation of the refineries before leaving office. He also encouraged the administration to deal with the fiscal and ministry policies situation. Importantly, he noted that the borrowing of this administration should stop, so it does not affect the impending administration.