Trade liberalisation, diversification touted as medium-term steps to save economy

As Muhammadu Buhari prepares to take over an ailing economy, experts suggest he toe the path of trade liberalisation and economic diversification as medium-term steps. They say he must also create an enabling environment for businesses and strive to increase capital inflow into the economy.

“Buhari should also simplify tax administration and reduce tax evasion,” said Bismark Rewane, CEO, Financial Derivatives Company, during a dinner held Tuesday by DuPont in collaboration with America Business Council in Lagos.

“Passage of the Petroleum Industry Bill (PIB) is also key,” Rewane said, while speaking on ‘Business Economic Outlook for Nigeria in the New Political Context.’

Rewane outlined immediate steps for Buhari as buiding a team of capable and trusted experts, evaluating and authenticating the economic status as well as de-prioritising.

“Buhari must differentiate between the good to haves and the need to haves,” he said.

“As short-term steps, there must be coordination between fiscal, monetary and structural adjustments. Also, the budget cycle needs to be aligned to the political cycle,” he further said, and suggested that the currency should be adequately priced while there ought to be a replenishment of fiscal and external buffers.

The financial expert said policy pronouncements were very ambitious, adding that the coming reform will likely be cautious. Nigeria is at a cross roads between tough unpopular market reforms and pandering to nationalistic interests, he said, saying economic policy will likely be focused on the monetary prudence, as there may be public listing of the Nigerian National Petroleum Corporation (NNPC) and selling down of individual in the joint ventures (JVs).

“He needs to reduce the cash call requirements and the depletion of national reserves and should unveil exchange rate policy that is tied to available oil revenues,” he said, saying further that improvement in transparency will allow for stronger oil revenues, though this is not enough to lead to a dramatic recovery of the naira.

There is anticipation from investors that Buhari administration may improve investment climate. Investors are waiting for policy directions of the incoming government to determine where their money goes. Nigeria has great market opportunities, demographic strength and untapped potential.

Pierrick Le Gallo, president, DuPont Turkey, Middle-East, African and Pakistan, said Nigeria was a promising market with huge potential, as the company was ready to provide the country with a range of products and services in chemicals, packaging and food industry service, among others.

“For us, Nigeria is a very promising market. I realise there are lots of opportunities in the country, given its demographic strength, made up of mainly the young population,” Le Gallo said.

 

ODINAKA ANUDU