Economy worsening, Organized private sector warns FG

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ABUJA, JANUARY 24, 2017 – The Organized Private Sector (OPS) on Monday warned the Federal Government that the Nigerian economy is getting worse by the day and having adverse effect on the sector.

The President of Manufacturers Association of Nigeria (MAN), Frank Udenba-Jacobs made a presentation on behalf of the OPS to Acting President Yemi Osinbajo during the 2nd Presidential Business Forum at the State House, Abuja.

The OPS comprises of the MAN, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Nigeria

Employers’ Consultative Association (NECA), Nigerian Association of Small and Medium Scale Enterprises (NASME) and Nigerian Association of Small Scale Industries (NASSI).

The MAN President listed the various challenges the sector has been facing under the present administration.

He urged the Federal Government to urgently addressed the challenges towards reviving the economy; revitalizing the industrial sector; growing MSMEs and creating employment for its citizenry.

He said: “We believe that the under – listed challenges should be addressed urgently: (a) Access to Foreign Exchange by the Real Sector: Access to forex has been a major challenge to businesses in the last two years. We are aware, and commend the Government on the various steps taken to resolve this issue including the standing directive by the CBN to Banks to channel minimum 60% of available Forex to manufacturers.

“The challenge this policy is currently facing is that there is inadequate monitoring mechanism to ensure that the policy achieves its desired result of allocating the stipulated percentage of Forex to bonafide manufacturers.

“The CBN list of 41 items is made up of 440 tariff lines. 31 out of the CBN list of items not valid for forex contain 393 tariff lines which are finished products. Those finished products may be retained on the list of items excluded from the official foreign exchange market.

“The remaining 10 items of 47 tariff lines are essential industrial raw materials that are either not readily available locally or there is a yawning gap between local production and national demand. Our position was made known to the Presidential Reconciliation Committee on this matter through the Honourable Minister of Finance in 2016,” he said.

He said that the government through the CBN should ensure that the 60% concessionary forex allocation to the manufacturing sector for raw materials and machinery importation is strictly implemented.

According to the group, the federal government should review the list of 41 items banned by the CBN from accessing foreign exchange in the interbank forex market so as to remove raw materials components that cannot be sourced locally.

Noting that the group supports the Administration’s push for economic diversification and resource based industrialization policy, he however advocated for policy consistency and coherence in order to achieve sustainability of the policy thrust.

The group also urged the Government to continue to dialogue with the various stakeholders with a view to articulating more appropriate fiscal and monetary policy incentives that will ensure the realization of the goal of economic diversification.

He said: “We strongly recommend that all major economic policies of Government geared towards diversification of the economy should be backed by law to ensure commitment and prevent reversals.

In the welcome address, Acting President Yemi Osinbajo said the main plan of the government’s economic plan is the sustenance of the robust private sector partnership.

“Indeed, it is our strong believe that sustenanable economic growth is only possible if it is private sector led and a great of attention has been paid as you will possibly find in sustaining private sector leadership especially in the plan of economic recovery and growth plan 2017 which is to be launched next month.”

Ministers including Kemi Adeosun (Finance), Udoma Udo Udoma (Budget and National Planning), Okechukwu Enelamah (Trade and Investment), Babatunde Fashola (Power, Works and Housing) and Lai Mohammed (Information) assured the group of government’s measures to turn around the economy.

Making presentation on the Economic Recovery and Growth Plan: (ERGP), Udoma said that the Strategic Implementation Plan (SIP) for the 2016 Budget was developed early in 2016, which laid down government’s key socio-economic development aspirations and strategies, as a pre-cursor to a fuller medium term plan.

He said that the Medium Term Economic Recovery and Growth Plan (ERGP 2017-2020) is being finalized to address current economic challenges, restore growth, and reposition the economy for sustained inclusive growth.

He said: “The ERGP is different from the previous plans and visions that have been developed and not effectively implemented.

“Implementation of the ERGP will be driven by: Strong political will; Close partnership and strong collaboration between public and private sectors, especially in the areas of Agriculture, manufacturing, solid minerals, services and infrastructure; Rigorous Implementation Plan (for instance, the ERGP forms the basis of the 2017 Budget); and Delivery unit.

“The ERGP builds on the existing 2016 SIP, and contains strategic objectives and enablers required to revive the economy. 59 strategies have been developed for implementation to achieve the strategic objectives of the ERGP.” He said

He listed twelve strategies developed for the success of the Economic Recovery and Growth Plan:

The strategies, he said, included restore of production to 2.2mbpd and reach 2.5mbpd by 2020; Privatize selected assets; Accelerate non-oil revenue generation; Drastically cut costs; Align monetary, trade and fiscal policies; Expand Infrastructure especially power, roads and rail; Revamp the four existing refineries.

Others include Improve ease of doing business; Expand social investment programmes; Deliver on agricultural transformation; Accelerate implementation of National Industrial Revolution Plan using special economic zones and Focus on priority sectors in order to generate jobs, promote exports, boost growth and upgrade skills.

Speaking with State House correspondents, the President of the Lagos Chamber of Commerce and Industry, Chef Nike Akande, urged the Federal Government to include members of the Organised Private Sector in the Ease of Doing Business Committee that was set up recently.

According to her, private sector operators are more conversant with the problems facing the sector and will be ready to quickly bring such to the notice of the government when included in the committee.

She said: “The ease of doing business committee that the government has set up is very important. Whenever I have opportunity to travel out of the country and make speeches, I always try to attract investment to the country.

“We, the private sector operators, want to be part of this committee because we know where the shoe pinches.

“By being part of the committee, the challenges being faced by the private sector can be brought to the notice of the Federal Government quickly.

“The good news however is that the Minister of Industry, Trade and Investment mentioned that they are already thinking about it.

“If we did not have this dialogue, we won’t know what they are thinking. I thank the government for this dialogue.” She stated.

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