The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has called on the government to promptly enact policies that will address the various crises affecting the country in order to avoid a possible economic collapse.
Speaking to pressmen during the chamber’s state of the economy review, Ide John Udeagbala, national president, NACCIMA said Nigeria’s economic indices such as inflation, unemployment, debt profile, etc. show signs of strain and need to be urgently addressed to avoid a crisis.
He highlighted the Sri Lanka crisis which is characterized by economic mismanagement, a rise in external debt, depleting foreign exchange reserves, a weakened currency, and rising prices, with the fear that Nigeria is following the same path.
“The Nigerian economy is operating below its productive capacity, as reflected in the high unemployment rates; we are struggling to meet our economic development objectives, the economy is still heavily import dependent for consumption and production and dependent on crude oil for government revenues and foreign exchange, we need to turn around and reposition the National direction,” he said.
Udeagbala highlighted the country’s public debt which as at December 2021 was N39.55 trillion according to the debt management office, noting that the current levels of debt service payments are considerably high and unsustainable given dwindling government revenues, especially as economic experts project looming macroeconomic instability if the increase in debt does not correspond with an increase in revenue.
“We urge the government to take a broader view on the implications of this debt-fuelled economic growth approach, and to look to other sources of funding, such as a preference for an increased tax base over increased taxes, while leveraging investments through public-private-partnerships in exchange for tax credits spread over time,” he said.
He said unemployment which was 33.3 percent as at the second quarter of 2020 affects youth and fuels insecurity, adding that the current scuffle between the federal government and the Academic Staff Union of Universities (ASUU) resulting in persistent strikes has severely hampered the educational system in the country, limiting the number of productive citizens available to the economy.
“Government needs to place more priority on the education sector, as human capital in a post-COVID world is fast becoming a source of foreign exchange and investment and also implement technical and vocational education programmes to develop semi-skilled labour,” he said.
Udeagbala said the role of the private sector in economic development is significant however this is threatened as they battle challenges and policies adverse to their profitability and sustainability.
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“The strategy of funding increasing government recurrent expenditure through public debt and the introduction of new taxes only provide short-term benefits in exchange for long-term negative impact; putting further pressure on the economy’s productive capacity,” he said.
Other policy review he recommended include the need for wider stakeholder consultations in policy design and implementation; a cohesive strategy to ensure that policies do not negate each other; leveraging the private sector for infrastructure development, productivity, education, job creation, energy sufficiency, and security; plus a cohesive strategy by the legislative and executive arms of government to manage government expenditure in the short-term as the productive capacity of the economy is expanded to boost the tax base.
Udeagbala revealed that NACCIMA’s 62nd Annual General Meeting and Conference is slated for May 25 & 26 in Ilorin, Kwara State, and is themed ‘the Petroleum Industry Act and related policies: the future of Nigeria’s energy sector’ where discussions will focus on issues like oil theft, smuggling, subsidy, non-performing refineries, and NNPC’s Oil-for-Product swaps.
