The Nigerian economy, like many others globally, has been grappling with issues such as a cost-of-living crisis, high inflation caused by soaring food and energy prices, and the impact of increased global interest rates and tightened financial conditions, leading to stagnation and technical recession in certain economies.
The Nigerian Employers’ Consultative Association (NECA) has highlighted the pressing need for the federal government to take substantial actions to steer the nation’s economy towards growth and address the socio-economic challenges it faces.
In response to these challenges, NECA’s President, Mr. Taiwo Adeniyi, has proposed a set of key measures and policies that the government should prioritize to promote economic stability and growth:
Macroeconomic Stability
The government needs to formulate consistent and coherent policy instruments to achieve macroeconomic stability with relatively low and stable inflation and exchange rates. This requires avoiding policy inconsistency, especially among different government agencies. Integrating monetary and fiscal policies to tackle inflation and high lending rates should be a priority.
Forex Availability
To alleviate inflationary pressures and boost the economy, the government should continue its efforts to unify various exchange rates in the economy. Enhancing forex availability and ensuring transparency in the foreign exchange management system will boost investment confidence. Removing capital control measures and allowing investors to repatriate their funds at will are essential steps.
Power Supply
Addressing the energy crisis is crucial for economic growth. Implementing the new Electricity Act, supporting the real sector with infrastructure, promoting renewable energy utilization, and boosting energy efficiency will help improve power supply and stimulate economic activity.
Refining and Petrochemical Industry
The government should review the status of national refineries and establish privatization modalities to enhance efficiency. Attracting private sector investment in gas aggregation to end gas flaring and encouraging private investment in the petrochemical industry will further strengthen the economy.
Tax Reforms
Simplifying and harmonizing taxes and levies in the real sector through the Joint Tax Board (JTB) will reduce the burden of multiple taxes on businesses. Implementing the Steve Oronsanye report to reduce and re-align government agencies and parastatals will streamline taxes, levies, fees, and administrative charges.
Infrastructure Investment
Increasing investment in the transportation sector, including roads, rail, and waterways, will mitigate the high cost of transportation logistics in the country. Moreover, investing in ports infrastructure and implementing a single window platform will streamline port clearing systems and enhance trade efficiency.
Poverty Reduction and Employment
Policies targeting poverty reduction and job creation are essential to reduce criminal activities and social vices. Creating an integrated framework to transition operators from the informal to the formal sector will expand the tax revenue base without overburdening existing taxpayers.
Border Security and Monitoring
Ensuring structured and effective monitoring of Nigerian borders with sufficient personnel will enhance security and help curb illegal activities.
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