The need for public-private partnerships in bridging infrastructural deficits, and fixing insecurity, which makes the country less attractive to investors, have been a consistent feature of quarterly appraisals of the Nigerian economy and in particular, its business environment, by the Nigerian Association of Chambers Of Commerce, Industry, Mines And Agriculture (NACCIMA).
Public debt, inflation and other variables have also featured, with calls for the legislative and executive arms of government to work together in reversing declining economic growth. The introduction of new taxes, NACCIMA says only provide short-term benefits in exchange for long-term negative impact, advocating wider stakeholder consultations in policy design and implementation.
In the first quarter of 2022 briefing by Ide Udeagbala, NACCIMA’s president, under a sub-heading of infrastructure development, it was advocated that the most pragmatic solution to the problem of Nigeria’s widening infrastructure deficit is to seek a wider collaboration between the public and private sector.
The need for this was said to be evident in the success stories of the Presidential Executive Order 7 of 2019 on Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme. Based on that, it was proposed the strategy is prioritised due to the fact that capital expenditure has fallen short in implementation in recent years.
“Only 60% of the NGN2.7trillion budgeted for capital expenditure in 2020, and 55% of the N2.1trillion budgeted in 2019, were actually expended,” Udeagbala said. “We recommend for the massive expansion of Executive Order 7, which constitutes a non-interest loan by the private sector to the government towards infrastructure development, payable in future, in the form of tax credits.”
In its briefing at the beginning of the second quarter, NACCIMA reiterated that “the most pragmatic solution to the problem of Nigeria’s widening infrastructure deficit is to seek a wider collaboration between the public and private sector for infrastructure development”.
NACCIMA, Udeagbala said, is on hand to work with government and other stakeholders to promote the wide adoption of this opportunity to accelerate economic growth and development. “The need for urgent solutions to meet the infrastructure needs of our economy bears repeating as the Nigerian private sector must now prepare for increased competition from trade agreements such as the African Continental Free Trade Area (AfCFTA) Agreement”, he said. The body also called for the passage of the National Transport Commission (NTC) bill into law because the lack of a regulatory framework has been an impediment to private sector investment.
By the third quarter briefing, NACCIMA commended the Federal Government on the development of key infrastructure within the country, which it said remained a major challenge to the Nigerian private sector. However, the pace of infrastructure development was said to be slow in relation to the needs of the economy. To match the needs of the private sector towards achieving sustainable economic growth, and considering the fiscal position of the government, it again proposed public-private-partnerships as a way to achieve this solution.
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On insecurity, in the first quarter briefing, NACCIMA’s president had said the security situation in the country demanded urgent attention and determined action.
“Insecurity dampens investor-confidence and labels the country as unsafe to do business. Such a situation does not present our country in good light to the rest of the world,” he said. NACCIMA, he said, was ready to partner with relevant MDAs using existing institutions such as the Police Community Relations Committee, to increase the effectiveness of security policies and measures.
The call for improvement in security remained one with an urgent tone by the second quarter, with NACCIMA again, underscoring the importance of security of lives and property to economic growth and development. “We call on the Federal Government, through its security agencies, to intensify efforts to counter and end the activities of kidnappers, bandits, terrorists, and other perpetrators of violence,” Udeagbala said.
By the third quarter; “economic activity in Nigeria is currently facing a risk of decline due to the perception of Nigeria as having an investment climate that is unfriendly to business,” said the NACCIMA president. “Recently, the National Bureau of Statistics reported a decline in foreign investment by as much as 81 percent. A loss of Foreign Direct Investment is just one dimension to which our economy is affected by insecurity.”
He further said domestic food production is at risk and there is a dimension of insecurity that is contributing to rising production costs and reduced consumption of goods and services. He reiterated that the security situation in the country demands urgent and serious attention.
Other issues highlighted over the course of the briefings so far this year, include port challenges and call for the establishment of customs and excise appeal tribunal.
“NACCIMA observes with dismay the unabating bottlenecks at our ports which have been hindering our quest to be a maritime hub in West Africa. Our members still encounter man-made delays in processing the clearance of their goods at the ports,” Udeagbala said. “In consonance with one of recommendations of the World Customs Organisation, we demand for the establishment of the customs and excise appeal tribunal to act as ombudsman in the resolution of disputes arising from imports and exports at the ports.”
In its third quarter briefing, NACCIMA highlighted the power sector and private sector energy needs, with persistent grid collapse resulting in the instability of power generation, distribution and supply.
NACCIMA said it was keen to see the progress of the Presidential Power Initiative formed between Nigeria and Germany during the visit of the then German Chancellor, Angela Merkel and her business delegation which included Joe Kaeser, Siemens AG CEO and signed as an agreement in July 2019, to among other things, increase operational capacity of the national grid.
However, Udeagbala noted that as the private sector awaits the progress of the Presidential Power Initiative, immediate intervention is required in the oil and gas sector from which production and transportation needs are met. Automotive Gas Oil (AGO), also known as diesel, and Jet A1 fuel have become prohibitively expensive forcing a lot of enterprises to shut down or scale down their operations.
The situation, he said, questions the readiness of Nigeria to compete in the global economy especially under trade agreements like the AfCFTA.
