Industrialist wants Buhari to deregulate oil sector, stem exchange rate volatility

An industrialist, John Agboola Odeyemi, has called on President Muhammadu Buhari to prioritise the deregulation of the petroleum industry and also initiate macro-economic and fiscal policies that will stem the volatility in the rate at which the naira exchanges with the dollar.

Odeyemi, who made this call in a brief interview with BusinessDay on the sideline of the just concluded Building, Construction and Mining Mart Exhibition in Lagos, said deregulation was the only panacea to the intractable challenges in the energy sector of the economy.

Reacting to the lingering energy crisis in the country that literally crippled the economy a couple of weeks ago, Odeyemi, former president of the Lagos Chamber of Commerce and Industry (LCCI), said what the country went through was a system collapse, pointing out that a situation where people could no longer put food in their fridge, fuel their generators, talk to one another on phone, or withdraw money from their banks was nothing but system collapse.

The fluctuation in the exchange rate was affecting a good number of businesses, he said, especially the small and medium enterprises, calling on the new government to take urgent steps to check the development.

In his opening remarks at the exhibition, Odeyemi noted that Nigeria was the fastest growing construction market globally, unlike the past eight years when the focus was on Dubai, India, China, etc.

According to him, the shock from oil and gas industry has made it necessary for governments to focus on construction, mining and agriculture, which have been identified as growth areas in the economy, advising that the new government should focus on these sectors, especially agriculture in the foreseeable future.

He lamented the heavy debt burden on the local construction firms, saying, “we have lived with the haphazard and lopsided system of doing things in Nigeria for a long time since independence. There is no time you will not hear contractors are owed by both government and individuals.”

“Our commercial practice is not well regulated,” he said, explaining that “in other countries and even here in the early 60s when we practised the British system, no work was given to a contractor until funding was secured – saved, borrowed Adesinaor syndicated – and after that you bring in professionals in engineering, architecture and quantity surveying, etc, to guide you through certification and payment as and when due.”

The present system was such that when contracts were awarded, it took long before it was signed “and sometimes when someone bids for contract, it takes long before the contract is awarded and so is certificate delayed after contract job is completed. All these take months to come. It also takes unnecessarily too long for payments to be made. This practice kills the industry and the contractor,” he said.