NECA tasks government on improved FX policy, job creation
• OPS raises concern over rising unemployment
The Nigeria Employers’ Consultative Association (NECA) has urged the Federal Government to sustain the improvement in Foreign Exchange (FX) management and availability to boost the market, create jobs and engender employee productivity.
As unemployment rose by 14.2 per cent in Q4 2016 according to a National Bureau of Statistics (NBS) report, the organised private sector (OPS) has attributed the rising unemployment rate to policy gaps and flawed FX policies that constrained the real sector.
It, therefore, urged the Federal Government to sustain the implementation of policies and reforms envisaged in its Economic Recovery and Growth Plan (ERGP).
Speaking at an interactive session with journalists in Lagos, President of NECA, Larry Ettah, said: “Manufacturers and other employers of labour have had to cope with recession, high inflation and interest rates caused by the wrong policy choices made by the monetary authorities.”
He urged the Central Bank of Nigeria (CBN) to lower interest rates and reduce the Monetary Policy Rate (MPR), which has been kept at 14 per cent since July 2016. He argued that another dimension of the negative implications of current interest rate policy was the phenomenon of ‘crowding out’ private sector access to credit by government.
Ettah charged the CBN to sustain improvements in Foreign Exchange management and availability, and move towards a market-based system. “NBS report in May showed that Nigeria’s economic recession continued in Q1 2017 ending March. The rate of economic contraction however, reduced to -0.52 per cent in Q1 2017 confirming a trend since Q4 2016, which suggests a continuing moderation of the recession.
“The good news is that inflation figures moderated for a third consecutive month in April 2017, reducing slightly to 17.24 per cent. The level of inflation remains high, especially in recession and rising unemployment, which confirms the continuation of stagflation (the simultaneous existence of unemployment, reflecting “stagnant” economic conditions such as recession, and inflation,” he added.
Reacting to the latest NBS report that showed unemployment increase by 351,015 in Q4 Director General of NECA, Olusegun Oshinowo, said the data was disturbing but not surprising in the light of the economic recession of the last three-quarters.
“It is believed in some quarters that the unemployment data is grossly underestimated given our demographic profile, which indicates a huge youth population.”
“We must, however, remind ourselves that the issue of unemployment, particularly, youth unemployment, has now become perennial and preceded the current recession.
“Even when the economy was posting a positive Gross Domestic Product (GDP) growth rate, the growth was not impressive with huge jobs creation,” he said.