Oyerinde: We Need Economic Roadmap from Tinubu

The Director General of the Nigerian Employers’ Consultative Association, Mr. Adewale-Smatt Oyerinde, in this interview with THISDAY dissects President Ahmed Bola Tinubu’s policy stance on how to boost Nigeria’s economy. Dike Onwuamaeze brings the excerpts:

President Bola Tinubu in his presidential inaugural address on May 29, gave hints on how he intends to remake the Nigerian economy. What is your take on the economic directions expressed in the address?

Somebody ones said that you campaign in poetry and then govern in prose. The president’s comments in his inaugural address sounded like a beautiful poetry. The comments he made and the policy statements, the trajectories that he expressed and his desire to govern were very wonderful, very commendable and it is actually the way we should be going. But the issue for us is this: without doubting the president’s desire to change the current trajectory of our economy and the nation as a whole, because we all know the issues. An average Nigeria understands the context in which we find ourselves. What we expect, or what we will urge, is a more definitive road map on how these things will be possible. The president mentioned the issue of insecurity beyond what has been done before, but how is he going to address it? He mentioned the issue of infrastructure, how exactly is this going to happen? He mentioned the issue of reducing unemployment, but how is it going to happen? While we wish the president the absolute success that he needs in taking the country to greater heights, it will also be necessary for his administration to start sharing definitive steps and frameworks needed to achieve each and every one of those policy trusts that he has mentioned. Because that is how we can build citizens consensus and also build stakeholders participation in ensuring that all those promises made will actually become a reality.

But he made some specific statements like addressing the organised private sector’s concern about multiple taxations, unified exchange rate, etc? 

For us it is a good thing. That shows that the president has been listening. That shows that he has been watching and that shows that he is receptive to the challenges that the organised businesses are facing currently. And that is gladdening to the hearts of the members of the Organised Private Sector of Nigeria (OPSN). But we will appreciate seeing definitive and immediate steps in dealing with these issues. With over 60 different taxes, levies and fees that are currently being paid by organised businesses and with close to 20 different bills at the 9^th National Assembly that have different quantum of percentages either 1.0 per cent or 0.5 per cent that organised businesses are supposed to pay to fund different agencies and commissions of the government. That is quite burdensome. When he mentioned the review of those multiplicities of taxes it was a welcome development for us.

What is your view on Mr. President’s statement that he would direct the CBN to work toward a unified foreign exchange? 

We have canvassed for this because the current dual rates only promote rent seeking; it only promotes corruption and does not promote productivity. How will an individual who can get a dollar at N450 at the official window go into production with all the intricacies involved in production and with all the regulatory and legislative challenges that you will face when he can cross over at the parallel market and exchange the same dollar he has collect at an official rate at above N700. It will take a lot of discipline for an individual not to do that. And that is the challenge that we have had that has promoted this rent seeking culture that does not reward those that are actually playing the role of deepening productive activities in this country. That is also a gladdening comment and we look forward to quick and immediate steps to bring the exchange rates to one unified rate. So, we also welcomed this initiative of the president.

What areas of the budget do you think that the president could initiate reforms that will increase the growth rate of the country’s GDP? 

Let us state that he cannot increase the GDP without increasing production. Production is at the heart of GDP growth. And to increase production it means he will address all the bottlenecks that hinder the manufacturing sector and every other sector of our economy. Once we deal with that and the production capacity increased significantly by the industry, you will also realise that you are resolving the issues associated with unemployment because the more the industries expands, the more they increase their capacity utilisation, the easier it is for them to generate more employment. That is also in line with the position and prayers of the OPSN that we cannot but focus on increasing the productive capacity of the industry as a whole. For the budget, I think that a lot has been said about the budget over time that there is an absolute fiscal indiscipline and we will like the president to take a critical look into those areas of fiscal indiscipline both within the context of the budget as a whole and within the context of what we have come to know as “padding” of the budget, which experts have said constitute a big leakage in our quest for fiscal discipline as a nation.

What fiscal measures will you suggest to the president to use to stimulate domestic production? 

One, businesses have concerns about access to foreign exchange; we have concern about access to credit; we have concern about enabling environment that will drive production. We have myriad of issues that are facing the organised businesses and the manufacturing sector as a whole. And as I have said earlier: beautiful comments that the president has made, stakeholders have noted those comments and what we are waiting for and looking for now are the structures and enablers that the president and his administration will put in place to achieve all these laudable policy initiatives that he has come up with.

Is the president’s assurance that foreign investors will be enabled to repatriate their profits from Nigeria enough to attract more investors? 

That also is a welcomed development. Currently there is over $700 million investor’s funds that have been strapped, especially those in the aviation sector that they cannot repatriate to their countries, which is a clog in the wheel of promoting FDIs flow into the country. But beyond the release of that fund, one of the critical things that we need to do is to ensure policy consistency. If we want to bring in foreign investors to the country, then we must ensure that we have consistency in our policy. Few months ago the fiscal monetary policy of the government that was already created with some definitive steps for progressive increment between 2022 and 2024 was suddenly reversed by the immediate past administration. And a system that was supposed to last for three years was abridged and the Federal Ministry of Finance announced that excise duties would be increased exponentially; it also announced that a new plastic tax has already been introduced against the spirit and the letter of the framework that was set in 2022 fiscal policy measure that is supposed to run between 2022 and 2024. These are the issues that are at the heart of whether an investor will come into the country or whether an investor will not come. Beyond facilitating the release of their capital, we must also create an environment that is stable; an environment that is predictable within the context of policy formulation, policy implementation and policy appraisal for those investors to actually bring their money to our country to invest. If there is no confidence that local investors are having the best support from the government, then it will be difficult for us to say that another investor will come into the country and invest.

What is your reaction to the president’s hint to also reduce the interest rate in the economy? 

The cost of fund is already high and if you want to promote investment and productive activities then you must find a way to reduce the interest rate. You must create a system that enables manufacturers and people involved in the real sector to actually produce and sell in such a way that productive activities will continue unhindered. The interest rate as we currently have it is quite high and if interest rate remains high it will discourage borrowing and discourage businesses from leveraging on all the opportunities that credit can provide within the context of increasing their capacity and leveraging on the opportunities that we have in the environment.

As a member of the OPSN, do you think that President Tinubu is a person the organised private can work with and achieve their objectives? 

Currently, there is no reason to doubt the sincerity of Mr. President. We believe that he understands the issues. We believe that he understands the challenges. He has been part of the system in the last eight years and we believe that he understands the depth of the rot that we have find ourselves in and as I have said there is no reason to doubt his sincerity. What the president needs to do with his administration is to ensure that he builds a national consensus by deepening stakeholders’ engagement so that everybody can rally round the president and his administration to achieve all the laudable projects and plans he has committed himself to achieve within the next four years.