- Time to pursue structural reforms is now-LCCI
- Nigeria needs to unlock vast assets-Teriba
Economic experts have called on the Federal Government to pursue structural reforms and put in place home-grown policies in response to the wobbly state of the economy which has seen growth projected to shrink by 3.4 percent.
The President, Lagos Chamber Of Commerce and Industry, Mrs. Toki Mabogunje, said this is important if the economy of the country is to bounce back from the precipice which the COVID-19 pandemic has pushed it.
“The current COVID-19 experience presents an ample opportunity for the government and policymakers to pursue structural reforms and put in place home-grown policies. Reforms such as the liberalisation of the petroleum downstream sector, exchange rate convergence, securitizing government’s equities in joint ventures, privatizing government’s redundant assets, PPP-led infrastructural development, export diversification, agro-based industrialization and cut in governance costs are direly needed to aid the rebound of the economy going forward and especially in times of adversity” she said.
She also revealed that due to dire state the economy is in with a majority of business owners planning to cut down salaries, downsize the workforce, or a combination of both, businesses, therefore, need adequate stimulus and intervention to preserve investments and save jobs.
“In light of the foregoing, therefore, policymakers and the Organized Private Sector need to come together to rescue the economy from collapse at this critical time. Recognizing the role of business and investment in the economy, it is imperative to have an urgent rescue package that would enable businesses to navigate the storms as well as preserve employments in the way of a year tax break for healthcare and pharmaceutical companies, airlines, manufacturers, agro-processors, SMEs and hospitality players. In addition, there should be a temporary suspension of the 50 percent increase in Value Added Tax, VAT rate till the end of the year. Also, P.A.Y.E should be suspended for the next six months. This would help boost the purchasing power and aggregate demand, thereby stimulating the economy” she added.
She further charged policymakers to embrace creativity and innovation at this critical time.
“Creativity and innovation in goods and services have become very imperative and necessary, perhaps the competitive advantage factor. Opportunities for productivity and economic optimization abound in sectors like healthcare, agriculture, and food, manufacturing, ICT amongst others. The success or otherwise of Nigeria at this critical period will depend to a large extent on our ability to leverage creativity and innovation to build a competitive economy and promote import substitution going forward. We, however, believe there is also a need for sustained improved domestic productive capacity and human resources in priority sectors” she said.
On his part, Dr Ayo Teriba, a Cambridge-trained economist and CEO of Economic Associates (EA) said it is time for the country to look inwards into the vast assets owned by Nigeria which could be brought to the narratives thereby unlocking domestic and external liquidity.
‘It is time to broaden the conversation to include the differences that the value buried in vast assets owned by Nigeria could bring to the narratives, evaluate the case for unlocking domestic and external liquidity from them and explore ways of doing so. Doing these will change Nigeria’s economic, fiscal and financial narratives by unlocking liquidity needed to strengthen Naira, rejuvenate fiscal, financial, and foreign exchange streams, break dependence on volatile oil revenue and costly deficits, rebuild infrastructure, diversify and accelerate growth, eradicate poverty and unemployment, and lay foundations for shared prosperity. In general terms, we must ensure that our policies are well-aligned with unfolding global realities by repositioning to get a good share of the post-pandemic financial green shoots: we must push for large Foreign Direct Investments, FDI/Remittances inflows as our main sources of external liquidity, and deploying those into transport and energy infrastructure to boost stability, growth, and trade” he said in the highly insightful Nigeria’s Post COVID Economic Outlook Analysis Series published by The New Diplomat.
Recall that earlier this week, The New Diplomat reported that the Federal Government of Nigeria projected that the country’s economy will contract by 3.4 percent this year as a consequence of the outbreak of the pandemic.
