Inaction on fiscal policies heightens investment risks

•Operators worried as govt delays appointment of heads of parastatals one year after

Stakeholders and operators in the private sector have expressed worry about the continued inaction of the Federal Government in the area of fiscal policies initiation and execution.
 
They have also raised concern over the prolonged failure to appoint substantive chief executives for critical agencies of government, one year after their boards were dissolved.
 
According to the operators, the extended leave of President Muhammadu Buhari could further erode confidence in his administration, already under pressure from investors, adding that the Nigerian economic environment is with riddled with uncertainty and several agency heads operating in acting capacity.

Professor of Political Economy, Pat Utomi, has warned that it is foolhardy to think that monetary policy will solve the country’s economic woes, leaving the fiscal component perpetually inactive.
 
“It does not work like that. The argument on the poverty of the nations, particularly in Africa, has shown that poverty is the outcome of wrong policy choices by leaders. You make good policies, but allow weak institutions to destroy it. This has put Nigeria in recursive mode.
 
“We need a political class that understands that leading a people is about being visionary and thinking about tomorrow’s problem before they come. Here, the leaders only stumble on issues and don’t think about the implications of their actions and inactions on the economy,” he said.
 
The Executive Director of Centre for Human Rights and Conflict Resolution, Idris Miliki, said there are more consequences for the economy than the rumours about the state of health of the President.
 
For him, any decision on the economy now must be taken cautiously, because the truth about the head of government is shrouded in uncertainty and that is a risk for investment.
 
“Development issues are now put on hold. Granted, we have the acting President, but we are all aware of Nigeria’s political landscape. He still has a limit to what he can do. But mostly, fiscal policy decisions are as good as stagnant. Unfortunately, the country’s economic rebound is hinged on the performance of the fiscal activities,” he said.
 
Speaking on the challenges by telecommunications operators are facing as a result of the economic situation in the country, the President of the Association of Telecommunications Companies of Nigeria (ATCON), Olusola Teniola, said the steep devaluation of Naira versus the dollar is serious.
 
According to him, it is impacting negatively on the Capital Expenditure programme of many operators in the telecommunications industry.He added that the the threat of further taxes being imposed on the industry in the form of Communications Services Tax (CST) and other problems, including reduced Foreign Direct Investment into the telecommunications sector and then the contraction of revenue accrued to the industry versus previous years’ astronomical growth are instances that should be avoided in 2017.
 
The ATCON President said the last quarter in 2016, was fueled by the realisation that predatory pricing has crept into the industry and the Nigerian Communications Commission needed to deal with this in terms of wholesale price determination interventionary measures.