To boost the level of effectiveness and efficiency of the various economic reforms undertaken by the current administration, experts have harped on the need for the federal government to urgently set up an economic management team to allow for independent inputs from professional economists.
The President Bola Tinubu-led administration has implemented several economic reforms since taking office including the removal of fuel subsidy, floating the naira to eliminate multiple foreign exchange rates, taking steps to boost tax revenue among others.
These reforms, whose promised benefits are still a long way off, have brought untold hardship on many Nigerians and significantly reduced the living standard of the populace, leading many to believe the process of execution were not properly thought out before implementation began.
President of the Nigerian Economic Society (NES), Prof Adeola Adenikinju, who spoke on the issue with LEADERSHIP, said the economy management team, composed of independent experts from academia and private sector, would provide the president with well grounded evidence-based analytics for effective implementation of policies.
Prof Adenikinju, said the federal government needs to inspire confidence in the people by showing them that its policies and implementation are well thought out.
“For instance, when the government announced the removal of fuel subsidy, there were a lot of push backs. The government has been simply going back and forth concerning the palliative it promised to give.” The situation, he said, shows clearly the federal government didn’t put in place a think-tank that will provide the intellectual analysis to solve this problem.
“There should have been a clear plan on ground. This is the issue and this is what would likely happen in the future, this is the solution and this is what we can use it to achieve. So it will show that you understood what you are trying to do and you have thought through about what you are doing,’ he said.
To strengthen the value of Naira against foreign currencies especially, the United States dollar, financial experts called on the government to immediately come out with new reforms, regulatory frameworks and guidelines for the nation’s foreign exchange market.
Speaking on a radio programme monitored by our Correspondent, Samuel Showunmi, a capital market executive at Iron Global Markets Limited, on the short and long term solutions to solving depreciation of naira, he said,operators are taking rules into their own hands because of the absence of FX regulatory guidelines.
According to him, “when laws come in, people will understand the dos and don’t of their activities in the foreign exchange market.
“There are no simple or quick fix measures. The measures must be a consolidation of different strategies and policies. The government must quickly come out with an FX reforms policy and I know that the Central Bank of Nigeria (CBN) is working on a new regulatory framework for the FX market but I will want to advise that we don’t delay too much because delay can be dangerous.
“Currently, what it means is that we don’t have any FX regulatory guidelines in place so people are technically taking the rules into their hands and doing whatever they like but when laws come in, people will understand dos and don’t regarding their activities in the market. Also, CBN will start their surveillance, monitoring and enforcement.
“I think CBN is smart because in the last few weeks, CBN has said it’s moving some of its key departments to Lagos. It’s a strategic move and I think market operators should be aware of this because it’s a move that is tilting towards CBN trying to move closer to the market and that tells us that the reforms and guidelines will soon come out and when the guidelines is out, CBN is closer to the market and surveillance, monitoring will follow suit then enforcement.”
“That is smart, but I will advise that we don’t delay the regulatory framework. It should come out on time especially now that they have moved base to the theatre of operations and are trying to set things in place which is a very good one. This means CBN is prepared and they know what to do and that will address some of the issues we are currently experiencing in the short term,” Showunmi stated
Showunmi explained that, in the long term, the government should increase the tax base by capturing so many Nigerians in the tax net.
He stated further that Nigerians must continue to patronise locally made goods saying the huge disparity between Naira and Dollar fuel poverty and widens the inequality gaps.
“In the long run, it’s for us to concentrate on those activities that will sustain the supply side. Like I said, keep the oil production level up and if we can not meet up to the quota, let’s sustain the current level, we shouldn’t go down to the current level. Policies that will attract foreign investors to operate in our market though, President Bola Tinubu is championing the course by travelling and addressing investors, these are the moves we need.
“On the fiscal side, we must come out with reforms that will support such a move and that’s tax tariff and regulations. On the tax side, we must look at increasing the government. revenue by increasing the tax base and not the tax rate,” it pointed out.
