How to grow economy in 2021

How to grow economy in 2021

The Organised Private Sector (OPS) wants the government to fix the nation’s infrastructure, address the education segmant and reduce the electricity tariff regime to make Nigeria’s products competitive.

The devastating impact of COVID-19 on the global economy, above everything else, has clearly demonstrated how a resolution of the pandemic will shape the direction of what to expect economically in 2021. How quickly, therefore, the coronnavirus is tamed and prevented from spreading, is sine qua non to projecting the fortunes of the economy and how it will perform every quarter of this year, going forward.

This is even more so now that the threat of a second wave of the COVID-19 is already in the air. That COVID-19 poses a threat to the economy, in a manner and scale yet to be fathomed, or ascertained is a stark reality. The impacts of the first phase of the virus that resulted in the March-April 2020 lockdown are yet to abate. It is estimated that during the lockdown periods, Nigeria’s Gross Domestic Product (GDP) suffered a 34.1 per cent loss, equivalent to USD16 billion. That is why the government had stopped-short of imposing another lockdown, the dread  of the second wave of COVID-19 notwithstanding.

This is why every talk and projection about the direction of the economy and its growth profile will remain in the realm of conjecture, or ceteris paribus, or other things being equal. As a country however,  with the biggest economy in the African sub-Continent according to International Monetary Fund’s (IMF’s) certification, and not being a stand-alone entity (since this is a global challenge), we can take solace in the fact that with the production of vaccines to time the COVID-19 mantra, amongst which is the Pfizer variant from the United States in which a Nigerian-trained medical doctor, Dr. Onyema Ogbuagu, an Associate Professor of Medicine and Infectious Diseases Specialist, Yale School of Medicine, is reported to have collaborated in developing, and others from China, Russia, and as well from Europe already being shipped and circulated to fight the pandemic, there’s assurance, that all things being equal (they hadly are), there’s hope that something might turn given that the Federal Government on its part, will do the needful.

LCCI’s agenda for govt

Nigeria’s foremost private sector trade sector group, the Lagos Chamber of Commerce Industry (LCCI), has called on the government to take stock and take decisive action in specific areas so as to steer the nation’s economy away from recession in which it is already enmeshed. It’s Director-General, Dr. Muda Yusuf, said the government should direct its attention to fixing the nation’s parlous infrastructure and security, amongst others.

In his words: “The government’s economic focus and priority should be on infrastructure development, health and security, the reason being that Covid-19 pandemic exposed not only the dearth of the nation’s infrastructure but also gaps in our health and security architecture.” Yusuf didn’t just stop there, he also called for the implementation of measures in other critical sectors begging for urgent attention, including job creation.

Hear him: ” The government should create jobs for our youth, we need competitive infrastructure, steady electricity supply and soft loans to help the entrepreneurs among them to thrive,” pointing out that there’s need to take a second look at our educational sector, so as to encourage entrepreneurial studies and vocational education. Citing India as an example, Yusuf said: “Developing countries such as lndia have instruments that encourage young entrepreneurs, known as ‘hand holding’, where businesses are encouraged with funding and training to ensure they do not go under before they mature and strong enough to stand on their own.

The LCCI boss, who responded to a set of inquisitions from The Nation, said the government could be held accountable to their promises by always putting their electioneering promises and polices in the front burner through the mass media, social media and the NGO’s and challenging them with verifiable evidence of how they stand with the public To help the economy move forward, Yusuf advocated a drastic cut in what he termed “the huge cost of governance by instilling and ensuring accountability in governance.

“I believe the Presidential type of government we are operating is expensive, why don’t we try the Parliamentary system? he asked, adding: “We may also limit the number of Advisers and Assistants appointed by public office holders.”

Yusuf also called for the implementation of part of the Stephen Osagiede Oronsaye report which recommended the reduction of government Ministries, Department and Agencies (MDAs), saying adopting the report along that trajectory will be helpful in reducing government expenditures, most especially the recurrent segment, while at the same time freeing substantial financial resources to build infrastructure.

He faulted the governments’ failure in not heeding the salient recommendations contained in the report. As he put it, “unfortunately, what you find is the creation of more MDAs that are more of money guzzlers than development focused.”

MAN: spare us from high tariff

Other sectors have also lent their voices as to what is expected of the government if the economy must rebound and be saved from a lingering recession. The electricity tariff hike and the spate of uncoordinated taxes across the nation’s productive spectrum have also come under criticism with calls on the authority to tread with caution.

The leadership of the Manufacturers Association of Nigeria (MAN) and other segment of the Organised Private Sector (OPS), have said increasing electricity tariff at this time would have negative effect on production cost, thus putting Nigerian products at a disadvantage in the export and pricing of finished goods, more so when companies are strategising  to play a role in the just-ratified African Continental Free Trade Area Agreement (AfCTFA).

The Director-General, MAN, Ajayi-Kadir,  expressed fears that the tariff increase will escalate production cost for manufacturers and erode whatever gains that may have been achieved. He argued that the cost reflective tariff being implemented is negatively skewed against MAN members which companies are classified in the ‘D’ category (D1, D2 and D3) where tariff is the highest. The manufacturing sub-sectoral groups with higher energy consumption which include Basic Metal, Iron and Steel and Fabricated Metal Products; Domestic & Industrial, Rubber and Foam; Non-Metallic Mineral Product; and Chemical & Pharmaceuticals sectoral groups would be worse-off,” Ajayi-Kadir said, stressing that the sector should be saved further hardship, as it was yet to recover from the COVID-19 pandemic and the consequent lockdown of last year.


Leave a Reply

Your email address will not be published.