By Habibat Aliu
To change the nation’s economic trajectory from a weak, non-inclusive, and highly vulnerable narrative, private sector operators, including the Nigeria Employers’ Consultative Association (NECA) and the Nigerian Economic Summit Group (NESG) have said the country needs to implement a comprehensive and system-driven economic agenda.
They argued that driving the economic agenda required a set of reforms for a conducive and enabling environment for generating economic benefits and prosperity that could be shared without leaving any Nigerian behind.
The NESG at the launch of the 2023 macroeconomic outlook, said despite the country’s great potential, Nigeria has faced several challenges in achieving shared prosperity and economic inclusion.
According to it, economic growth has been fragile and vulnerable, accompanied by increasing unemployment; poverty, and worsening living standards, while key drivers of the outcomes include a high inflation rate, foreign exchange volatility, and an unsustainable fiscal path, among others.
Noting that Nigeria’s poor socioeconomic outcomes indicated that economic growth is devoid of shared prosperity, explained that persistent challenges such as weak productivity, skewed growth, infrastructural deficit, slow pace of industrialisation, insecurity, and low foreign investment inflow would continue to hinder Nigeria from reaching its full economic potential.
The report, with the theme ‘Nigeria in Transition: Recipes for Shared Prosperity’, proposes a framework for achieving a Shared Prosperity Agenda (SPA) for Nigerians by internalising the unique features of the country, which aims to show the policies that are prerequisites for SPA in Nigeria.
Director-General of NECA, Adewale-Smatt Oyerinde, noted that returning the economy to the path of sustainable growth demands that certain fundamentals such as stable and highly predictable revenue streams, growth-focused monetary and fiscal policies, secured and business-friendly environment and legal, regulatory, and legislative system that promotes equity, justice and enables enterprise competitiveness must be right.
Without these fundamentals, which he said are currently either lacking or highly compromised, the economy would continue in circles.
He said the obvious misalignments between the fiscal and monetary policies, which are deflating investors’ confidence and making the country unattractive for Foreign Direct Investment (FDI), despite the nation’s large market, have made growth projections academic.
He expressed the need for the government, especially the incoming one, to demonstrate political will by implementing policies that will drive the economy back on a growth trajectory.
According to him, deliberate efforts must be made to reverse some of the current policies and implement new ones.
He said all leakages associated with government revenue must be blocked, while he also called for a wholesome review of the tax administration to make it more equitable and investor-friendly.
As the nation nears the mark of N77 trillion in debt with negligible impact on infrastructural development, the NECA boss urged the incoming government to develop strategies to diversify the revenue base through the revival of the country’s lagging non-oil sectors.
According to him, the fable about the debt to GDP ratio can no longer hold as the government in the 2023 budget has also surpassed the three percent debt to GDP ratio stipulated in the Fiscal Responsibility Act.
He said: “While there have been projections for a global recession in 2023, the time for a major paradigm shift in our economic philosophy is now. Over the last decade, the country has spent over N10 trillion on fuel subsidies, about N15.5 trillion on capital expenditure, N2.5 trillion on Health, and about N3.9 trillion on Education.
“This is a misplacement of priority and shows that critical developmental items such as education, health, and infrastructure have suffered due to the crass misplacement of our economic priorities. The nation seems to be behind in all economic growth fundamentals, except a large market, which if not harnessed might become a curse as the implementation of the AfCFTA swings gains more steam.
“While we appreciate the concern of ASUU on the need to increase tertiary education funding, however, the call for the increase of TETFUND from the current 2.5% to 10% is unfortunate and undesirable. We should not kill a sector to feed another, as businesses are overburdened with taxes already, making the country’s taxes one of the highest in the world.
“At this point, we need to analyse the effectiveness of the TETFUND over the period before providing a knee-jack solution. We are of the view that there is a need to design a long-term funding mechanism for tertiary education and contributors to the fund must be assigned to supervise its spending. We urge that all hands must be on deck to rescue the economy from near collapse as the current Government winds up its activities.”
