NECA Laments, Says Economy Will Remain Bleak For Months, Blames Buhari For Unfulfilled Promises

By Akinwale Kasali

The possibility of the nation’s economy witnessing any growth looks bleak following the analysis of Nigeria Employers’ Consultative Association, NECA. It has warned that there will not be any significant growth in the nation’s economic outlook in the next six months.

The Group said the economy will remain bleak if the Federal Government does not take a pragmatic implementation by initiating various reforms that will make the nation witness significant growth economically.

NECA is the umbrella body for employers in the country.

Adewale Smart-Oyerinde, the Director General of NECA, described 2023 as  most challenging for businesses. He said this was compounded by the petrol subsidy removal and harmonization of the foreign exchange.

According to him, “2023 was a year in which we had significant economic challenges that created different dynamics for organised businesses.

“While trying to surmount the obstacles that COVID threw in our ways, other challenges that we created for ourselves as a people continued to dig us deeper into the hole.

“It is now stale news to say tax remains top of the issue that organised businesses faced. Policy inconsistency from 2022 up to the early part of 2023 was also a serious challenge that organised businesses faced.”

Smart-Oyerinde lamented that the last administration of President Muhammadu Buhari made a lot of promises that were unfulfilled, adding that the rate of reversal of those policies made it very difficult for organised businesses to plan.

“Similarly, regulatory and legislative incursion and harassment negated all the attempts at improving the ease of doing business.

“These were the things that we faced in the early part of 2023.”

He however noted that after the general elections, “The new government of President Bola Ahmed Tinubu came up and removed fuel subsidy which naturally increased the cost of doing business and living. Just as energy cost skyrocketed, the cost for logistics also skyrocketed.

“The harmonisation of the exchange rate also came with its own dynamics.

“The value of naira plummeted significantly and we are still trying to find a balance. Forex, which remains scarce, also had serious effects on the cost of doing business for organised businesses, especially those compelled to import inputs.

“All of these things created problems for organised businesses.

“Though some have said the government is only seven-month-old and it has started on a good trajectory by trying to reverse the pattern of recklessness that we witnessed in the past, we hope that the effect of those policies will start coming to fruition as quickly as possible this New Near.

“We know that the last administration supported the naira with over N150 billion on a monthly basis for us to have a seemingly workable naira exchange rate.

“This government has stopped that pattern. It also stopped the pattern of fuel subsidy that had become a deep hole in the country’s pulse while aligning the fiscal and monetary policy environment.

“This is a positive for us. We are hoping that the foundation that they have set will create an opportunity for the economy to start booming before the end of 2024, so that the pattern of businesses exiting the country and high rate of employment will reduce significantly.

“For us, 2023 was a challenging year and we hope that the steps taken by this administration will yield positive results this 2024.”

On the economic outlook for this year, the NECA’s Director-General said “The first and second quarters might not be called definitive quarters for us.

“Probably, the end of second quarter to the end of year might be more friendly.

For instance, there was a report that the dollar inflow to the country has increased by about four per cent.

“We also know that the Taiwo Oyedele Presidential Committee on Fiscal and Monetary Reforms will round off its work between the first and second quarters of 2024 with the expectations that the implementation of far-reaching recommendations of that committee will start coming up to make the tax environment much more friendly and make tax collection much more efficient as well as reduce the burden of multiplicity of taxes on organised businesses.

“If that is done, it would create a bit of dynamics within the context of multiplicity of taxes – both legal and illegal – that organised businesses are paying.

Speaking about the Refineries, Smart-Oyerinde stated that, “ As reported, we know that the Port Harcourt refinery has come on board, Dangote refinery has received the third tranche of millions of barrels of crude oil.

“The expectation is that, by the reason of both refineries coming on board and one or two modular refineries, the pressure on Forex will reduce.

“ The Forex that is used in the importation of petrol might be saved resulting in an increase in the volume of Forex that we have in the country, which could also have an effect on the value of the naira.

“In the long run, it is all about demand and supply because if there is shortage of dollars and huge naira chasing a few dollars, naturally demand and supply says if demand is more than supply, then the price will go up.

“If supply is more than demand, the price will come down. It is simple economics.

“The price of crude has also increased significantly. This will change the game for government as more revenue will come in.

“We also know that a lot of reforms and private sector engagement are going on in most of those agencies.

“If we aggregate all these signals, we might want to say we are getting a semblance of positive vibes. If all these things are implemented conscientiously with a high level of citizen engagement and consensus, there are chances that 2024 will be better than 2023.

“ However, it is neither here nor there. But one thing is for us to see these conjectures, patterns and postulate that this is what might happen.

“The context of implementation of those things can change whether those will turn to positives or not.

“We believe that with continuous engagement and advocacy by the private sector, 2024 will be a foundational year for the prosperity and economic growth that we are all anticipating.”