NECA: 2022 Very Challenging to Organised Private Sector

Dike Onwuamaeze

The Nigeria Employers’ Consultative Association (NECA) has described the outgoing year as a very challenging one for the organised private sector of the Nigerian economy.

This view was shared yesterday by the Director General of NECA, Mr. Adewale-Smatt Oyerinde, in a statement titled, “Reviving the Shuttering Economy: NECA Proposes Policy Options.”

Oyerinde said: “Year 2022 remained one of the most challenging years for organised businesses. The pandemic-inflicted leadership and sustainability challenges forced organisations to take extraordinary measures in real time, with zero planning,” as things changed drastically and dramatically, leaving no industry across the world unaffected.

He said Nigerian enterprises were forced to operate under excruciating circumstances, made worse by inherent systemic contradictions during the year.

“As organisations faced sustainability issues, they, at the same time, had to deal with rising energy cost, regulatory gangsterism, inconsistencies and contradictions in the fiscal and monetary policies, which has made doing business unattractive and created clogs in the wheel of attracting Foreign Direct Investment (FDI), rising inflation and increasing cost of doing business, which invariably reduced the capacity utilisation of industries,” he said.

While noting that some of these challenges were not peculiar to Nigeria alone, Oyerinde stated that, “government’s approach to solving them has remained suspect and does not inspire confidence.”

He, therefore, urged government, “to stop making mockery of Nigeria and the citizens” because “it is distressing to witness long queues for petrol when government claimed to have paid trillions in petrol subsidy.”

According to him, “government must unravel the scam surrounding the subsidy and make pronouncement on a definitive plan to remove it.”

Speaking on policy options that could revive the stuttering economy, Oyerinde noted that “the tax system is currently skewed against responsible tax payers.”

He, therefore, argued the incoming government in 2023 to reform the tax system to create incentives for payers and expand the tax net rather than the current over-burdening of legitimate businesses.

He said: “Consistency in the tax policy will improve stakeholders’ confidence rather than the short-sighted attempt to sabotage the established roadmap set out in the 2022 Fiscal Policy Measures and Tariffs Amendments (FPM 2022), which covers 2022-2024.

“While it was gladdening to hear that government had jettisoned the proposed increases in excise tax, a more collaborative and evidence driven approach should be adopted for future changes.”

The director general of NECA also commented on the rising public debt that has crossed N41 trillion and a seemingly unregulated borrowing by state governments.

Oyerinde advised the incoming government in 2023 to “make deliberate attempt to resist the urge to borrow but should rather establish an accountability system that reduces the cost of governance, curb corruption and make budget padding almost impossible

“While government and some of its agencies sometime act as all-knowing, we urge inclusiveness in policy design, implementation and monitoring.

“As the private sector is arguably the largest contributor in terms contributions to GDP, it is therefore, imperative to include the organised private sector in all economic-related decision of various arms and tiers of government.”

Oyerinde stated that “it is no gainsaying that the country faces enormous challenges, mostly self-inflicted. We, therefore, urge the current and incoming Government to explore policy options as suggested and adopt a more robust, all-inclusive strategy, focusing not only on the diversification of the economy but also on the imperative to urgently reform the current fiscal structure to reflect fiscal federalism, promote healthy competition and drive productivity.

“Government also should address short term appropriation for long term infrastructure to avoid white elephant projects and create a template for assessing and evaluating the performance of regulatory agencies to national and business sustainability, among others.”