NECA Suggests Policy Options For Revival Of Economy

The Nigeria Employers’ Consultative Association (NECA) has proffered policy options to the federal government and the incoming one, in the face of dwindling revenue and myriads of economic challenges and with seeming confusion on how to arrest the economy’s slide into deeper challenges.

This is even as it called on incoming government to demonstrate the political will by implementing policies that will drive the economy back on growth trajectory.

Speaking in Lagos, the director-general, Adewale-Smatt Oyerinde, stated that, “returning the economy to the path of sustainable growth demands that certain fundamentals must be gotten right. Without these fundamentals, the economy will continue in circles. 

“Among these fundamentals are a stable and highly predictable revenue streams, growth-focused monetary and fiscal policies, a secure and business-friendly environment and a legal, regulatory and legislative system that promotes equity, justice and enables enterprise competitiveness. These fundamentals are currently either lacking or are highly compromised”

Shedding more light on the issues, the NECA boss averred that, “at the last count, the nation is neck-deep in debts hovering around N44.06trillion in September 2022. However, if the N23.7 trillion CBN loan is securitised, our debt stock could amount to about N77 trillion in June 2023; Crude oil production grew in the month of December, 2022 by 4.2 per cent month-on-month to 1.23million barrel per day, but remained significantly short of the 1.8million barrel per day allocated by OPEC to the nation, amounting to about $2.5billion loss monthly at an average of $100pb.

“Oil theft seems to continue unabated and the unsustainable subsidy on petroleum products have all conspired to reduce Government’s revenue, leading to absurd debt accumulation.

“The obvious misalignments between the fiscal and monetary policies, which is deflating investors confidence and made the country unattractive for Foreign Direct Investment (FDI), in spite of our large market have all made growth projections academic.”

Furthermore, Oyerinde noted that, “deliberate efforts must be made to reverse some of the current policies and implement new ones. 

“All leakages associated with Government revenue must be blocked (oil theft, skewed concessions, fuel subsidy etc), a wholesome review of the Tax administration to make it more equitable and investor-friendly should be initiated.”

Additionally, the NECA boss suggested that, as governments in other climes are either reducing tax rates in order to enhance economic activities, promote sustainable consumption and attract investors, Nigeria cannot continue to over-tax its businesses and citizens.

With over 50 different taxes, levies and fees and Company Income Tax hovering around 35%, he said, raising taxes in order to increase revenue will be counterproductive. 

“As the nation nears the mark of N77 trillion in debt with negligible impact on infrastructural development, the incoming Government must develop strategies to diversify the revenue base through the revival of the country’s lagging non-oil sectors. 

“The fable about Debt to GDB ratio can no longer hold as the Government in the 2023 budget has also surpassed the 3 percent Debt to GDP ration stipulated in the Fiscal Responsibility Act,” he pointed out.