The Federal Government has been called upon to address the necessary economic parameters to prevent the country from slipping into another round of recession.
National President of the Nigerian Association of Chamber of Commerce, Industry, Mines and Agriculture (NACCIMA) John Udeagbala, made the call in Lagos yesterday through a report from the association’s third quarter economic briefing.
He said the advice was imperative, following the possible false sense of security from the 3.11 per cent economic growth recorded in this year’s first quarter.
He said that the statistics might not have fully captured the supply and value chain disruptions brought about by the COVID-19 pandemic and the Russia-Ukraine conflict.
“While other stakeholders might see this as the leveling out of economic growth from the COVID-19 pandemic, the private sector is concerned that external shocks brought about by the Russia-Ukraine conflict, have put immense pressure on the productive capacity of our economy.
“We therefore urge once again, the implementation of government policy that places priority on improving domestic production, otherwise face a likely state of economic recession by the end of 2022,” he said.
On inflation, the NACCIMA president said that the decision of the Monetary Policy Committee of the Central Bank of Nigeria (CBN) to raise the Monetary Policy Rate from 13 to 14 per cent was welcomed.
He, however, stated that the move was majorly an inflation management measure, and did not address the root cause of the inflation such as rising food prices, devaluation of the Naira, and high cost of energy and transportation.
“Nevertheless, we look forward to the continued implementation of the Central Bank’s intervention in the agriculture, manufacturing, energy, healthcare and export sectors, which will ensure some improvement in food and energy supply,” he said.
Addressing the country’s power situation, Udeagbala called on the government to renew its focus on implementing policies to ensure Nigeria’s energy sufficiency to become a net exporter of petroleum products and eventually, electricity.
He also called for urgent action in fixing domestic refineries, or the implementation of the Petroleum Industry Act, which is currently hobbled by the petroleum subsidy regime.
“If we estimate that Nigeria has spent an average of N2trillion a year for the past 16 years on petroleum subsidy, it is time to ask ourselves, how many refineries could we have built in that time?
“As we acknowledge the economic impact of the sudden removal of petroleum subsidy, we advocate a gradual removal with attendant policy initiatives to cushion the effect on the economy.
“We can start by taking a look at other developing countries in this space, such as Trinidad and Tobago, who never had to carry out Turn Around Maintenance on their only refinery, or revisit crude oil to petroleum product swap arrangements,” he said.