Wale Oyerinde, the director-general of the Nigeria Employers’ Consultative Association (NECA), has urged the Federal Government to urgently adopt a multi-pronged approach to rescue the nation’s economy from total collapse.
Speaking in Lagos, Oyerindne said Nigeria is currently plagued by a combination of spiraling inflation, rising energy cost, scarcity of foreign exchange (Forex), dwindling value of the naira, near comatose aviation sector, stuttering education system, rising debt, depleting foreign reserve and rising fuel subsidy expense, among others, which threaten to ground the economy if urgent steps are not taken.
According to the DG, “there is no better time for the government to reappraise its economic policies and deepen engagement with the organised private sector, than now.”
He said while the government’s effort to salvage the economy is commendable, there is, however, a need for a more holistic approach to resuscitate the stuttering economy.”
Oyerinde further averred that being dependent on crude oil for about 90 percent of its foreign exchange earnings and 80 percent of its budgetary revenues, Nigeria lives dangerously on the precipice, with a major chunk of its revenue dependent on the complexities of global crude demand and supply.
“A dangerous blend of self-destructive tendencies, insecurity and fiscal and monetary policy inconsistencies have also conspired to make the situation worse,” he said, adding that as revenues continue to shrink, the nation continues to dig its feet deeper into debt.
“At different times over the past few years, various international bodies, including the World Bank, International Monetary Fund and the World Trade Organisation have warned about the excessive nature of the country’s borrowing.
While some stakeholders have canvassed that the revenue to GDP ratio of the country is healthy, recent announcement by the minister of finance, budget and national planning that revenue to debt service ratio is in the negative calls for urgent concern”.
Oyerinde recalled a warning by the World Bank in April, that “the rising cost of fuel subsidy could significantly impact public finance and pose debt sustainability concerns”, noting that “this projection is almost happening.”
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Making recommendations on how to deal with the multi-facet challenges, the NECA DG said “a deliberate and economic priority influenced approach and wide consultation with stakeholders should commence, with the view of harvesting alternative policy options to re-energise all sectors of the economy.
While the challenges of revenue shortage are acknowledged, burdening businesses with new taxes or levies will be counter-productive and self-destructive action. Over-burdening already burdened businesses will only lead to business closure and an escalation of job losses with consequential effects on our social and economic stability. Government should, in the short-term widen the tax net, reduce wastages in governance, and focus on economic projects that will stimulate the Nigerian economy and guarantee an enabling environment for businesses to operate,” he said.
