Posted on October 28, 2016
President, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, Chief Bassey Edem
Members of the Organised Private Sector have suggested that as a way out of the current economic recession, the Federal Government should introduce policies that will reduce the cost of doing business in the country.
The President, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, Chief Bassey Edem, and the President, Manufacturers Association of Nigeria, Dr. Frank Jacobs, gave the suggestion in separate telephone interviews with our correspondent on how to end the recession.
They both agreed that although the government had taken numerous steps to get the country out of the situation, there was a lot more that needed to be done.
Edem said, “The announcement of a release of N700bn for capital projects is an example of the government’s approach to tackling economic recession, one that involves massive government spending (either sourced from borrowing or taxation); this will eventually filter down and revitalise economic activities and growth.
“However, given the multi-dimensional issues of devaluation of the naira, inflation, lower global prices and domestic output of crude oil, a more productive approach will be to focus simultaneously on creating an enabling environment in the real sector of the economy to encourage economic activities by introducing policies that reduce the cost of doing business in the sectors identified as being able to provide a short-term alternative to crude oil as a foreign exchange earner. Notably, the agriculture, solid minerals and Micro Small and Medium Enterprise sub-sector.
“Although, the Federal Government seems to have initiated processes such as the inauguration of the inter-ministerial committee on the ease of doing business in Nigeria, we believe that current plans are not sufficient in terms of cohesive policy making and implementation.”
Jacobs agreed with the NACCIMA president that the policies were not achieving the desired results and blamed that on the nature of government’s policies and the reluctance of banks to implement the allocation of 60 per cent of total foreign exchange to the manufacturing sector.
He said, “The economy was declared to be in recession only recently and usually government’s policies take time to craft, hence policies in response to the present economic recession are taking time to be released.
“The two policies in response to the recession, which affect manufacturers directly, are the recent circular of the Central Bank of Nigeria directing that 60 per cent of all forex allocation should be made to manufacturers for the importation of raw materials and machinery and the recent $300m intervention in the forex market for manufacturing, agriculture and aviation sectors.”
He also said, “MAN appreciates the good intention of the CBN with regard to the policies, but the former is not working as the banks are not co-operating, with the result that manufacturers are yet to benefit several weeks after the circular was released. “As for the $300m forex Intervention, the amount is too little in relation to the demand by the sectors, put at $800m, but believing that half bread is better than none, it will help our members to remain in business. It is our hope that such interventions should be a regular feature to prevent the collapse of the manufacturing sector arising from forex scarcity.”