Business
How to address Nigeria’s economic challenges — NECA
The Nigeria Employers’ Consultative Association (NECA) has described the economic challenges facing the country as multi-faceted and called for a holistic and multi-pronged approach toward resolving them.
NECA’s Director-General, Mr Wale Oyerinde, in a statement on Sunday in Lagos, said there was no better time for the Federal Government to reappraise current economic policies and deepen its engagement with the organised private sector.
‘’The nation is currently faced with multiple challenges: with dire combination of spiraling inflation; rising energy cost; scarcity of foreign exchange (FOREX); dwindling value of the naira and an almost comatose aviation sector.
‘’Also, stuttering education system; rising debt; depleting Foreign Reserve and rising fuel subsidy expenses among others, which threaten to lay bare the country’s economy.
‘’While government’s effort to salvage the economy is commendable, there is, however, need for a more holistic approach to resuscitate the stuttering economy, ‘’ he said.
The director-general noted that Nigeria had always lived dangerously on the precipice, with a major chunk of its revenue dependent on the complexities of global crude demand and supply.
According to him, a dangerous blend of self-destructive tendencies, insecurity and fiscal and monetary policy inconsistencies have also conspired to make the situation worse.
“In April 2022, the World Bank warned that the rising cost of fuel subsidy could significantly impact public finance and pose debt sustainability concerns: alas, this projection is almost happening.
‘’The fiscal performance report released recently by the government confirmed the accuracy of these projections.
‘’The combination of a struggling aviation sector and roads taken over by bandits have also conspired to fuel the situation, leading to rising inflation at 18.6 per cent, according to the National Bureau Statistics.
‘’These have continued to worsen the promotion of commerce and the increase the rate of de-industrialisation of some regions of the country,” he said.
Oyerinde, therefore, called for the commencement of a deliberate and economic-priority- influenced approach and wide consultation with stakeholders.
This, according to him, should be with the view of harvesting alternative policy options to re-energise all sectors of the economy.
‘’While the challenges of revenue shortage are acknowledged, burdening businesses with new taxes or levies will be counter-productive and a self-destructive action.
‘’Over-burdening already burdened businesses will only lead to business closure and an escalation of job losses with consequential effect on our social and economic stability.
READ ALSO: Buhari’s nephew, Fatuhu resigns from APC
‘’Government should, in the short-term widen the tax net, reduce wastage in governance, and focus on economic projects that will stimulate the Nigerian economy and guarantee an enabling environment for businesses to operate.
‘’An enabling environment for local businesses will create the platform for new foreign direct investment, which could increase foreign exchange inflow into the country,” he said.
The director-general also urged the government, as a matter of urgency, fix the four national refineries and encourage the development of modular ones as a precursor to total removal of fuel subsidy.
He said that interventions aimed at improving living standards to stimulate consumption and enterprise sustainability to promote job creation should be implemented.
Oyerinde said, ‘’While forex scarcity persists, allocation of the available forex to manufacturing and other productive sectors of the economy should be given priority. ‘’
Following the marginal reduction of the pump prices of premium motor spirit (PMS) by the Dangote Petroleum Refinery and the Nigerian National Petrol Company Limited (NNPC Ltd), civil society groups have reacted by calling for further downward review.
Recall that the Dangote Petroleum Refinery had announced a partnership with MRS Oil and Gas to offer petrol at N935 per litre at retail outlets, while it reviewed the ex-depot price from N970 to N899.50 per litre.
The move, saw state oil major, the Nigeria National Petroleum Company peg its retail prices at N965/litre.
ALSO READ: Dangote Partnership: MRS Urges Nigerians To Insist On N935/Litre Petrol Price Nationwide
However, the civil society groups are of the opinion that the price reduction, fall short of expectations.
According to the Chairman, Centre for Accountability and Open Leadership, Debo Adeniran, the reduced price of N935/litre was still expensive and unsatisfactory.
He pointed out that petrol was just one of the products coming out of crude and that both government and private business could still give out free petrol to citizens while making huge profits from the other products.
In his words, “Well, we believe that if NNPC and the private sector actually give out PMS for free, they will still not run their business at a loss, because the other derivatives of petroleum products can still serve them, and can still make them to break even. So, even at that N900 and something, it’s still expensive.
“Dangote has kind of mooted the idea that it could drop to as low as N650. And if he has mulled this, then it means that it is the state, it is the NNPC that will have been the clog in the wheel of such progress. And you know also that we expected that fuel prices, especially PMS prices, will drop below N200 when Dangote was expected to come on stream.
“So, it’s unfortunate that we are still talking about over N900 and they want us to jump up and rejoice for that. That is not satisfactory. They should just let us see the breakdown of their production cost and why it’s still there. I mean, there are countries like Libya under Gaddafi that gave out PMS for free and they didn’t run anything at any loss. So, I believe that it can still go further down.”
On his part, the Executive Director of the Civil Society Legislative Advocacy Centre, Ibrahim Rafsanjani, commended the reduction of fuel prices by the NNPC and Dangote, but said the government could still reduce the price.
“Dangote’s own is about N899 or something like that. Well first and foremost, we are happy that there is a little reduction in the prices. But also based on analysis and based on facts and evidences, we believe that it is possible for the Nigerian government to further reduce the prices.
“Because if a private company can reduce the price and it still makes profit, we wonder why government-owned enterprises cannot really pity its citizens,” he said.
The Central Bank of Nigeria (CBN) has announced a significant growth in the country’s economy, with a 3.46% increase in gross domestic product (GDP) in the third quarter of 2024.
This marks the third consecutive quarter of expansion, up from 3.19% in Q2 2024 and 2.54% in Q3 2023.
According to the newly published Q3 economic report, Nigeria’s GDP output rose to ₦20.115 trillion, reflecting a notable improvement from ₦18.285 trillion in the previous quarter.
READ MORE: Tragic Funfair Crush In Ibadan Claims Children&’s Lives
The CBN attributed this growth primarily to the performance of the non-oil sector, which grew by 3.37% compared to 2.80% in Q2 2024.
The report highlighted transportation, crop production, and other sub-sectors such as financial & insurance services, information & communication, trade, and real estate as major contributors to the expansion.
The non-oil sector accounted for 3.18 percentage points of the total growth rate.
“The expansion of the non-oil sector was driven by the performance of the financial & insurance, information & communication, crop production, trade, transportation & storage, and real estate sub-sectors,” the report stated.
Despite the economic growth, challenges persist. Inflation, particularly in food prices, remains a significant concern, standing at 39.93% as of November 2024.
Rising food and energy costs have also impacted transportation expenses, with intercity bus fares increasing by 20.23% year-on-year to ₦7,117.17 in July 2024, according to the National Bureau of Statistics.
Furthermore, the cost of petroleum, now exceeding ₦1,000 per litre, has driven up logistics and transportation expenses, adding pressure to households and businesses alike.
The CBN acknowledged these challenges, noting that the growth was achieved despite headwinds such as high inflation and rising operational costs.
Enhanced security measures in the Niger Delta have boosted domestic crude oil production, while restrictive monetary policies have helped moderate inflation in some areas.
“The growth recorded in the country is a result of continued efforts to improve the business environment, streamline cumbersome business processes, and deepen the quality of business infrastructure,” the CBN noted.
However, the report comes amid concerns over businesses exiting Nigeria due to persistent economic challenges.
Asharami Synergy, a leading downstream energy solutions provider, has demonstrated its commitment to community development and education by donating essential furniture to Gaskiya Junior School in Ijora, Lagos, Nigeria.
Biztellers reports that the social responsibility initiative was executed in collaboration with Sahara Group Foundation – the social impact vehicle of global energy conglomerate, Sahara Group.
It was gathered that the initiative is part of Asharami Synergy’s ongoing efforts to support education in communities.
The donation includes classroom desks and chairs for the JSS1 classes.
ALSO READ: NCDMB Rewards Winners Of 2024 Edition National Undergraduate Essay Competition
CEO of Asharami Synergy, Nomnso Dike, said the project will create a more comfortable and functional learning environment and enhance student performance.
“We are delighted at the opportunity to support the attainment of Sustainable Development Goal (SDG) 4, which focuses on ensuring inclusive and equitable quality education. It has been a privilege to collaborate with the management and students of Gaskiya Junior School to deliver this project, and we look forward to future opportunities to enhance academic performance in this historic institution,” Dike said.
According to him, Asharami Synergy’s education-focused social impact initiatives have benefitted over 10,000 individuals. They focus on building capacity and providing the resources necessary to help students learn and grow sustainably.
“Education is the foundation of a brighter future, and at Asharami Synergy, we believe that every child deserves a learning environment that inspires and empowers them” he noted, adding, “This donation is not just about providing furniture; it’s a reminder to the students that their dreams are valid, and we are committed to helping them achieve their goals.”
Vice Principal Academic of Gaskiya Junior School, Sola Oladokun, commended Asharami Synergy for the donation, noting that it would inspire students to perform better with “increased concentration and fewer distractions”.
“These desks and chairs are a game-changer for our students. It’s heartwarming to see their excitement, and as teachers, we are equally thrilled because this will make teaching and learning more effective. We are incredibly grateful to Asharami Synergy and Sahara Group Foundation for this thoughtful intervention,” she added.
Two representatives of the students, Akin Moses and Chukwudi Gift, at the event said the donation would increase their “desire to dream bigger and concentrate better during lessons”.
Also speaking at the commissioning, COO at Asharami Synergy, Adekanmi Adesola, said, “What started as an opportunity to support the communities that host our operations has now come full circle. This donation directly impacts the lives of these students, and we are proud to bring smiles to the faces of the students and teachers.”
Olamide, Tiwa Savage, Phyno, Others Dazzle Fans At Flytime Music Festival 2024
Ondo Election Legal Battle Intensifies As PDP’s Ajayi Files Appeal
Ibadan Funfair Tragedy: Former Ooni’s Wife, Others Remanded Over Stampede
Labour Kicks Against N935/Litre Petrol, Wants More
Davido Spotted With Burna Boy’s Mother At Tony Elumelu’s All White Party
CSOs Urge Further Reduction Of Pump Prices Of Petrol
OSSG Raises Alarm Over Murder Plot By APC Chieftain
NCC, SMEDAN, NAICOM, SEC, Others Set for SUPERNEWS SMEs Conf June 13
Sahara’s Tonye Cole resigns from GPHCDA
Niger Delta Avengers: President Buhari Reads riot Act …considers the carrot and stick option
Oando opens ultra-modern petrol station in Lagos
