•Stakeholders react to Buhari’s
Democracy Day address
In this report by COLLINS NWEZE, CHIKODI OKEREOICHA, OKWY IROEGBU-CHIKEZIE, DANIEL ESSIET and AKINOLA AJIBADE, Nigerians bare their minds on the speech read by President Muhammadu Buhari on Democracy Day and suggest the way out of the prevailing economic doldrums.
REACTIONS yesterday trailed President Muhammadu Buhari’s first year scorecard. Such reactions came from the businessmen, financial experts and stakeholders in the oil sector.
They agreed that the administration was on track but said the Federal Government would have to double up its efforts at revamping the ailing economy.
In his Democracy Day speech, the President restated his administration’s resolve to keep the naira steady. According to him, devaluation had done dreadful harm to the Nigerian economy in the past. He, however, backed the decision of the Central Bank of Nigeria (CBN) to allow market forces to determine the naira value.
“Furthermore, I supported the monetary authority’s decision to ensure alignment between monetary policy and fiscal policy. We shall keep a close look on how the recent measures affect the Naira and the economy. But we cannot get away from the fact that a strong currency is predicated on a strong economy. And a strong economy pre-supposes an industrial productive base and a steady export market. The measures we must take, may lead to hardships,” the President said in his speech.
It’s time to devalue naira
In his reaction, Head Currencies Unit at Ecobank Nigeria, Olakunle Ezun, said the President has not hidden his disdain for devaluation. He said the President was able to move and embrace a new lexicon, flexibility in the exchange rate.
Ezun said the position of the Monetary Policy Committee (MPC) was reiterated by the president when he reluctantly agreed that he would take a second look at the position of those pushing for devaluation.
He said the market will react to whatever decision the CBN takes on the exchange rate, especially concerning the new guidelines on flexible foreign exchange (forex) policy.
Ezun said with the removal of subsidy on fuel, government now has better leverage to take decisions on the forex policy.
“My thinking is that government should just go ahead and devalue the naira. The investors are just waiting for government to take that step. The investors will also react to the flexible forex policy guidelines, especially if it does not meet their expectations,” Ezun said.
Also reacting, the Managing Director, EM Consolidated Investment Nigeria Limited, Emeka Moses, said the President has not hidden his devaluation fears for a long time. He said that the coming flexible exchange rate regime can only work if the CBN has enough dollars to intervene in the market.
Moses said the CBN does not at present, have the capacity to consistently intervene in the market.
“The quantity of oil being sold by government has dropped. The foreign reserves have also dropped which also makes government’s efforts to intervene difficult,” he said.
Public-Private
Partnership helpful
In a statement by its President, Mrs. Nike Akande, the Lagos Chamber of Commerce and Industry (LCCI) rated President above average in his first 12 months in office. The Chamber hinged its rating on the prevailing socio-economic circumstances.
The statement reads: “These are clearly very challenging times for many economies, especially oil dependent countries. We commend the giant strides of the present administration and achievements in the following areas:
- War against corruption and the recovery of looted funds, a crusade which has been taken beyond the shores of our country;
- Containment of terrorism which has led to the progressive confinement of terrorists to smaller geographical area in the Northeast;
- Growing goodwill for Nigeria in the comity of nations, driven by the integrity and sincerity of purpose that your Excellency brought into political governance in the country;
- Plugging of fiscal leakages and boosting the country’s revenue base as well as savings through the effective implementation of the Treasury Single Account (TSA) and the Integrated Personnel Payroll Information System (IPPIS) respectively.
“On the economic front, we note and commend the various measures taken to diversify the economy, promote self-reliance, put an end to fiscal leakages of the past and ensure fiscal viability. These are not the best of times for the Nigerian economy.
“The collapse of oil revenue had adversely impacted government revenue, our foreign reserves, GDP growth rate, and the capacity to create jobs. Tough policy choices have thus become inevitable.
“Evidently, there are no easy choices at this time. There is need for sacrifice on the part of the private sector, the public sector and the citizens. We appreciate the context of some of the policy choices of government.”
The LCCI also urged the President to take some steps that could make the private sector supportive of the economic recovery process being pursued by the Federal Government.
Some of its recommendations include:
- Acceleration of Public-Private Partnership (PPP) programmes to support the government in the provision of infrastructure;
- Regular public-private dialogue to fix macroeconomic and sectoral challenges in the economy;
- Stepping up efforts at creating an enabling environment for investors.
According to the LCCI, the steps, if taken, will strengthen private sector capacity to complement government’s efforts towards the delivery of its mandate to the citizenry.
Home-grown science,
engineering base necessary
Appraising the presidential address, the immediate past President/Chairman of Council, Institute of Business Development (IBD), Mr. Ifeanyi Obibuzor, pointed out the missing links. He said the President address failed to incorporate the technology on how to turn around the nation’s economic fortune.
Obibuzor, an engineer, described Nigeria as a country at the cross-roads, requiring the administration to return to the drawing board and develop the home-grown science and engineering infrastructure base.
This, he said, holds the key to job creation and industrialisation. He told The Nation that lack of a robust national science and engineering infrastructure remains the missing gap in the searchfor economic development.
According to him, engineering infrastructure consists of the capabilities and physical plants, which are required to enable a prolific machine and equipment design and production to take place in the country.
He said the acquisition of endogenous capability in science and engineering infrastructure would create jobs through industrialisation, noting that the first component of national engineering infrastructure involves the development of well-motivated technical manpower and expertise, through local and overseas training.
Obibuzor added that this was necessary for the country to raise the required critical mass of development engineers, technologists, technicians and managers with the technological know-how and practical skills.
The second component, he said, involves the establishment of many sectoral Engineering Infrastructure Development Complexes (EIDCs), which develop technologies by research and development (R&D) and by technology adaptation, as well as the generation of associated private sector satellite industries.
Admitting that the Federal Government in the past undertook some key elements of the national engineering infrastructure initiatives like the Ajaokuta Iron and Steel Complex, Aladja Steel Project, Oshogbo Machine Tools and Aluminium Smelter Project, among others, he said such initiatives must be vigorously pursued, completed for efficient production.
Obibuzor noted that the country’s failure to develop science infrastructure base is responsible for some of the prevailing challenges. He listed such challenges as the inability to refine and distribute crude oil; translation of agric policy into actual measurable production of food items in sufficient quantities and outright sale or abandonment of strategic industries in the iron and steel industry.
He blamed the rising unemployment level on the inability to complete the plants that could have created jobs.
He said: “The old factories cannot be sustained due to lack of endogenous capacity to reproduce spare parts. There is urgent need to challenge our universities, polytechnics and engineers by equipping them with the right incentives to mass-produce indigenous technologies.”
Agriculture to the rescue
Some stakeholders urged the President to scale up investment in agriculture.
A former Dean, Faculty of Agriculture, University of Ilorin, Prof. Abiodun Adeloye said the failure of the government to announce a blue print on agriculture will hurt the sector.
Adeloye believes that repositioning the sector would be an automatic stabiliser for the troubled economy. According to him, the President and his team have not been able to declare an action plan on how they intend to rejuvenate the agriculturalsector.
He urged the government to strengthen on-going donor support agricultural programmes, including those sponsored by the World Bank.
The National President, Independent Petroleum Marketers Association of Nigeria(IPMAN), Mr Chinedu Okoronkwo, reacted to the President’s remarks on destruction of oil installations and other national assets by militants in the Niger Delta, clean up of Ogoniland and gradual increase in the prices of crude oil at the international market.
Okoronkwo said those caught tampering with oil and gas pipelines should be treated like economic saboteurs.
Describing wanton destruction of oil and gas installation as grievous offences, the IPMAN chief said militants and other people found destroying those facilities should be brought to book by the Federal Government.
He said militants, under the auspices of Niger Delta Avengers (NDA) should not be treated with kid’s gloves because their activities were aimed a crippling the nation’s economy.
His words: “Nobody is above the law. Nigeria is a sovereign nation with the full paraphernalia of a constituted authority. In view of this, every Nigerian must either obey the law or be punished whenever they commit offence, especially destroying of national assets like oil and gas installations, as well as facilities belonging to the Nigerian National Petroleum Corporation (NNPC) and its Joint Venture (JV) partners.
He said the fight against militants and other unscrupulous elements should be fought by all, saying it was not a battle only for the government. He said Nigeria’s survival is dependent on its human and natural endowments.
‘’Whenever we are talking about national assets, we are talking about economic realities. Oil is the mainstay of the economy. It generates 70 per cent of the revenue accruing to the government. Based on this, efforts must be geared towards secuirng the assets at all cost,” he said.
The IPMAN chief said the resolve of the President to carry out the United Nations Environmental Programme (UNEP) recommendations on the Ogoni clean-up, would help in fostering and stimulate growth in the region.
Okoronkwo said: “Cleaning Ogoniland and other areas affected by oil spill would restore natural habitats in the oil-rich region. This would not only foster unity between nature and the inhabitants of oil producing states but also improve their standards of living.”
On the rebounding oil prices at the international market, he cautioned the government against dissipating energy on it but urged the President to apply available funds to the development of other sectors and to vigorously pursue the diversification policy.
