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2023: Economy in dire straits, OPS tells candidates go beyond rhetoric

By Helen Oji, Gloria Nwafor, Bankole Orimisan and Adaku Onyenucheya
31 October 2022   |   4:31 am
Though presidential candidates in the forthcoming general elections have expressed commitments to addressing some of the challenges faced by Nigerians, members of the Organised Private Sector (OPS) have asked the candidates to go beyond rhetoric and promises...

• Doubts persist over immediate subsidy removal by next govt
• Tinubu, Atiku, Obi are pro-market reformers, good for economy, says Uzum 

Though presidential candidates in the forthcoming general elections have expressed commitments to addressing some of the challenges faced by Nigerians, members of the Organised Private Sector (OPS) have asked the candidates to go beyond rhetoric and promises, noting that many of the manifestoes lack details and commitment as to how the candidates will address the challenges.

According to them, many of the promises are generic and economical on the strategy to address problems of insecurity, inflation, poverty and the unsteady business environment.

Already, Nigeria’s rising inflation is expected to worsen with the present flood, weakening naira, high energy costs and plans to remove petrol subsidy next year.

Addressing these challenges is believed to help steer the country in the right direction.

While the frontline candidates, Asiwaju Bola Tinubu of All Progressives Congress (APC), Alhaji Atiku Abubakar of the Peoples Democratic Party (PDP) and Peter Obi of Labour Party (LP), say they support private-sector investments and want government to focus mainly on creating a business-enabling environment, how they hope to achieve the agenda remains vague.

Specifically, Peter Obi argues for a more prudent economic system, saying Nigeria has more of a spending problem than a revenue problem. According to him, Nigeria should not be borrowing for consumption, saying, “it has become imperative to restrict federal borrowings to the statutory five per cent of the previous year’s revenue.”

On petrol subsidy, he said: “Yes, I will remove fuel subsidy, but I have to offer an equivalence that will benefit citizens. But if that is not achievable, I will not remove it.”

Tinubu supports an economic model that involves public-private partnerships and concessions. Tinubu said his administration would focus on fiscal issues and stricter tax enforcement. New taxes could be introduced and stiffer penalties put in place for defaulters.

PDP’s Atiku also promised to incentivise the economy with regulations and tax incentives for a consortium of private sector institutions to establish an infrastructure debt fund of an initial carrying capacity of $20 billion. According to him, this will be for the financing and delivery of large infrastructure projects across all sectors of the economy.

BUT former Director-General and Chief Executive Officer, Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, told The Guardian that the candidates need to do better than the campaign promises, adding that the reality of governance is overwhelming and defies certain economic theories.

According to him, taming inflation, addressing insecurity and making the business environment conducive should be the priority of the candidates, citing the need for clear strategy on implementation. He noted that the private sector most times, bears the short end of the stick when policies flip-flop.

For a better Nigeria, the Director-General of the Nigeria Employers Consultative Association (NECA), Adewale Oyerinde, said Nigeria needed a nationalist in the mould of the new President of Kenya, William Ruto, as a leader that can take bold decisions that may not be convenient in the short run, but in the long run, citizens would benefit.

Noting that there were too many challenges bedevilling the country and the urgency to achieve a favourable working environment, he tasked the next administration to support the private sector, stating that it will drive the economy out of the woods.

The NECA chief advised that the next government should face the challenges of the private sector to reduce the high rate of unemployment and the need for the leadership to have the political will to take tough decisions.

“The private sector remains the engine room for development. Its contribution to the Gross Domestic Product (GDP) is almost absolute. The sector is critical for any country, because they create jobs, generate income for government and promote consumption. The effect of one business being sustainable or holding down has a consequential effect on society.”

Head Equity, Planet Capital, Dr Paul Uzum, said Tinubu, Atiku and Obi have similar economic ideology, which is pro-market, pro-private sector, capitalism and liberalism.

To him, the three candidates will likely remove fuel subsidy to balance the budget, while their liberal philosophy will attract Foreign Direct Investments (FDI) and Foreign Portfolio Investors (FPI).

He said foreign exchange would be floated with mass privatisation of public companies and sale of Federal Government assets in their era.

“It will be a return to the Obasanjo days with a booming private sector, with government providing guidance through initiating policies. Tinubu talks of expanding the tax base to raise government revenue while PDP and LP will likely do the same.

“In summary, there will be no significant difference in economic outcome from the three parties. However, the only difference may be the calibre of people appointed to implement government policies and the shades of capitalism.”

Uzum added that these pro-market reforms would trigger a boom in the stock market. He said what is expected from the next president is to unlock rapid development of transport infrastructure in Nigeria, noting that underdeveloped infrastructure services push up operating costs in no small measure.

Uzum also stated that there is need to intensify efforts towards tackling security challenges in the country. He added that insecurity constitutes disincentive to investment, as no investor would stake his money to a country where his investment cannot be protected.

“For Nigeria to survive economically, we need to remove petrol subsidy and deregulate the exchange rate. Dealing with security challenges and addressing crude oil theft are other major areas. Others are deregulating the economy, removing subsidies to eliminate fiscal deficit and then market reforms to attract FDI and FPI.”

Chief Executive Officer of Wyoming Capital and Partners, Tajudeen Olayinka, described most promises made by politicians during their campaigns as mere rhetoric.

However, he stressed the need for the next president to urgently adopt short and medium to long-term strategies to find lasting solutions to the nation’s security challenge.

Olayinka argued that where there is insecurity, the operating environment cannot be stable to do business and if operators continue to operate in such clime, businesses cannot do well.

The President, National Council of Managing Director of Licensed Customs Agents (NCMDLCA), Lucky Amiwero, said all the candidates do not understand the maritime sector, noting that their manifestoes are political, just to win election and not to address the problem of the sector.

He said the sector is seen as a cash cow, as all the monies collected by Nigerian Maritime Administration and Safety Agency (NIMASA), Nigerian Ports Authority (NPA) and Nigeria Customs Service (NCS), since their creation, have not been utilised for the development of the maritime sector.

Amiwero said the laws of the ports system are not obeyed by maritime agencies, who are working at cross purposes, thereby crippling trade facilitation.

He added that the country’s ports system is complex and has been destroyed, as it lacks policy consistency, credibility, predictability, coordination, transparency, proper procedures and mode of conveyance with no regulations/regulator.

According to Amiwero, the inefficiencies of the ports processes have crippled export, import and the manufacturing sector, as the country keeps losing its cargoes and industries to other neighbouring countries.

He said the government should focus on holistic and complete overhauling and reform of the ports system, as well as modernisation of all the processes in line with international best practices.

Amiwero said experts must be assigned to head all the maritime agencies and not politicians who create problems and build political ports all over the country, noting that other countries have positioned their ports to take over cargoes meant for Nigeria.

The Secretary General of Merchant Seafarers Association of Nigeria (MESAN), Captain Alfred Oniye, said none of the manifestos of the political parties addressed the major challenges of the maritime sector that controls over 95 per cent of the country’s economy.

He said they all focused on export promotion, import and freight forwarding, which are just the minimal issues compared to the real problem the industry is facing, which is indigenous vessel ownership, training of manpower and employment.

Oniye said till date, Nigeria cannot build or own a sea-going vessel nor implement the Cabotage Act that states that any vessel sailing within Nigerian waters must be built in the country, owned, managed and crewed by Nigerians.

He said this would have created massive jobs for the youths, as the shipping industry has capacity to create 50,000 direct jobs and over 10 million indirect jobs, noting that vessels sailing on Nigerian waters are owned by foreigners, thereby causing capital flight.

Oniye said government keeps spending millions of dollars to train cadets outside the country, rather than set up world standard maritime institutions in the country.

In the same vein, the Chairman, Board of Trustees, Nigerian Shipowners Association (NISA), Isaac Jolapamo, bemoaned government for always inviting stakeholders and reeling out plans to develop the maritime industry, but eventually fail to fulfill and implement them.

Jolapamo lamented that promoting indigenous ownership of vessels to lift Nigeria’s trade should be topmost priority of any government.

He advised the candidates to focus on developing the capacity of Nigerians, as it would help the country generate money and curb capital flight.

Executive Secretary/Chief Executive Officer, Nigerian Council of Registered Insurance Brokers (NCRIB), Tope Daramola, said the insurance industry wants the next administration in 2023 to make insurance compulsory for all Nigerians, particularly, building insurance and with enforcement across Nigeria.

Daramola also called for Federal Government’s support to the sector in the area of increasing patronage by Ministries, Departments and Agencies, through adequate insurance of government property and in speedy passage into law of the Consolidated Insurance Bill 2020, which has just been presented on the floor of the National Assembly.

In the same vein, Managing Director of Tangerine General Insurance Limited, Mayowa Adeduro, appealed to the next government to support the industry’s growth and development by collaborating with stakeholders to work out ways of streamlining the taxation applicable to the sector.

He argued that the insurance industry currently suffers from a complex tax structure that has always resulted in multiple taxation without understanding the complexity of insurance placements.