NECA urges FG to re-appraise conflicting monetary, fiscal policies

The Nigeria Employers’ Consultative Association (NECA) has urged the Federal Government to re-appraise its monetary and fiscal policies, among others, in view of the multifaceted challenges confronting the nation.

The body recommended that there should be deliberate alignment between monetary and fiscal policies to reduce the contradictory tendencies.

Director-General of NECA, Wale Oyerinde, said despite numerous policies initiated by the monetary and fiscal authorities in the last few months, the policies have had little or no impact.

The reasons, he said, are due to inherent inconsistencies in the policies, strategic sabotage by external forces and lack of adequate consultation during the crafting and implementation of the policies.

Oyerinde said rather than holding on to and promoting some of these policies that had proven not to be effective within the context of current economic realities and challenges, the authorities would do well to re-appraise each monetary and fiscal policy among others, to gauge their effectiveness and long-term relevance.

To achieve this, he said a deliberate and transparent process of evaluating economic policies should be institutionalised, with the Organised Private Sector of Nigeria (OPSN), being critical operators in the economy at the centre.

The NECA DG, said despite interventions by the Central Bank of Nigeria (CBN) to stimulate and drive the economy towards the path of sustained growth, the interventions have not yielded desirable outcomes in increasing the flow of FX, reflate the economy or promote enterprise competitiveness.

To this end, he stated that in view of the observed misalignment between the fiscal and monetary policies of the government, has becomeit was urgent and important for the concerned authorities to close ranks and align the policies for the good of the nation.

According to him, while the monetary policies aim to reflate the economy through the various interventions, the fiscal policies tend to create bottleneck for the productive sector by introducing new taxes and levies, such as telecommunication excise tax, excise duty on carbonated drinks, beverage’s tax and NYSC levy, among many others.
He said the introduction of these taxes and levies, as well as other anti-enterprise regulations, to a large extent, would further hamper the consumption pattern of the citizens, reduce capacity utilisation of enterprises and worsen the macroeconomic situation of the country due to its multiplier effects.

Recommending a way out of the current fiscal and monetary challenges, Oyerinde said some key conclusions and recommendations that were made during the body’s employers’ summit, held recently, could serve as alternative policy action for the government to consider.

He said a deliberate and independent mechanism with the active involvement of the private sector should be put in place to regularly gauge the effect and impact of policies and regulations, noting that ineffective ones should be changed and new ones formulated.

“While the CBN’s Micro, Small and Medium Enterprises Development Fund (MSMEDF) is laudable, we urge that the implementation and allocation process should involve the OPSN to enhance its credibility, effectiveness and ensure strict monitoring,” he said.