The President, Lagos Chamber of Commerce and Industry, Dr. Nike Akande, discusses how to move the nation’s economy forward in this interview with Anna Okon
What is the nation’s economic outlook for 2016?
With the cabinet in place, ongoing budget processes, drive for economic diversification, concerted efforts against corruption and the various reforms in the critical sectors, we expect to see positive developments in the economy.
This year (2016), Gross Domestic Product growth is expected to rebound, though slowly, if the right mix of fiscal and monetary policies is put in place to stimulate the economy and attract domestic and foreign investments.
While the recovery is expected to be driven by increase in government expenditure, the growth in oil sector may be constrained still by low price and dragging investment drive.
The Treasury Single Account is also expected to plug leakages, curb corrupt tendencies, increase revenue to government and thereby improve funding for government projects.
The Managing Director, International Monetary Fund, Christine Lagarde, recently paid a visit to Nigeria. The core of her visit were issues bordering on drastic fall in government revenue occasioned by the plunge in global oil prices, budget deficit financing, economic diversification and lots more. What is your take on these issues?
We must recall that the new political administration led by His Excellency, President Muhammadu Buhari came into power on May 29,, 2015 at the time the country was facing serious economic challenges as you earlier highlighted.
The challenge faced by the economy, as a result of the decrease in oil revenue, which prompted fiscal imbalances, is a global phenomenon especially among the oil-exporting countries. We need international cooperation and partnership as there is, obviously, no easy way out of the crisis. Therefore, the visit of the IMF boss is, indeed, timely as it offers us the opportunity to deliberate on these issues towards fostering the international partnership and cooperation, especially with the Fund.
Above all, the government needs to develop other sectors of the economy like manufacturing, agriculture and solid minerals and service sectors to strengthen the current economic cord.
The way to do this is to create an enabling environment in terms of the right infrastructure, affordable long-term financing and the right policies.
Nigerians are very enterprising. Once the environment is right, Nigerians will make things happen. We also need to patronise made-in-Nigeria products to encourage our local manufacturers.
There had been persisting scarcity of petroleum products leading to long queues at filling stations, traffic congestion on the roads and loss of man hours. What is LCCI’s position on the downstream petroleum sector?
The persistent fuel crisis in Nigeria again underscores the need to urgently review the current policy framework of the oil and gas industry, especially with regard to the petroleum downstream sector. We commend the efforts of the government in revamping the refineries with a view to reducing our fuel importation in the coming years. We hope to see a situation where eventually all our refineries are operating optimally and the private sector should be encouraged to participate more in the sector thereby creating jobs for Nigerians.
The private sector is ready to partner the government to make these efforts work as government must not be left alone in these endeavours.
How have your members been coping with the challenges of electricity supply and consumption in Nigeria? And what is the way out?
The power situation has been a challenge from time past and fixing it will require consistent investments in that sector. The present administration has shown that power supply is one of its top priorities.
The Honourable Minister of Power, Works and Housing, Mr. Babatunde Fashola, who was the governor of Lagos State, is known to be a go-getter.
I believe private sector businesses are ready to pay for electricity once it is available. I urge the government to continue with the pace of reforms in the sector to ensure that more electricity consumers have meters.
You are the second female president of the LCCI in its 127-year history. How would you assess the leadership opportunities for women in the corporate world in Nigeria? And what is the Chamber doing to encourage women entrepreneurs?
Women are doing well in many spheres of the corporate world. For instance, the Chairmen of First Bank, Access Bank and Guaranty Trust Bank are all women. We also have many women as Chief Executive Officers of big organisations across all sectors. We are doing well. But we can do better.
The ratio, to a large extent, is still skewed towards men. The LCCI has a vibrant women group which focuses on the advancement of the interest of women. They seek opportunities for women in all areas of enterprise and finance. They also collaborate with embassies and international organisations that have programmes for women.
In addition, the Chamber has a robust mentoring programme for young people to make them entrepreneurs. We attach these young people to our members for a period of time to teach them and share experience with them on managing businesses. The third batch of about 35 mentees graduated only a few weeks ago. We also train young entrepreneurs to build their capacities in different areas of business.
You are a two-time Minister of Industry. What was the experience like? And how would you assess the present administration from a private sector point of view?
First of all, my experience as a two-time Minister of Industry was very exciting and yet challenging. But I thank God for the opportunity to serve my country at such a high level.
During my tenure, we set up industrial development centres all over the country to support industrialisation, especially small scale industries. I also supervised many parastatals that interfaced with investors. One of them was the Nigerian Industrial Development Bank, which is now the Bank of Industry.
I have also supervised the Benue Cement Company, the Machine Tools, Oshogbo and many more.
Frankly speaking, the government has been doing a great job fighting terrorism. You know you cannot do business when security is not guaranteed.
Also, the government has also been doing a lot in fighting corruption which is also one of the biggest problems we have in the country.
With the new budget and some new policies, I am sure we will have more programmes and activities this year. We will continue to give government the necessary support to make the country better.
As the new President of the Lagos Chamber of Commerce and Industry, what is your vision for the chamber and how do you plan to achieve it?
First of all, I give glory to the Almighty God for the opportunity to serve my country on this platform and in this capacity. I am also grateful to members of the LCCI for electing me. Being the President of the Chamber is, indeed, a great task. I will, therefore, be resolute in contributing my quota to the advancement of the cause of the Nigerian private sector and the progress of our economy as a whole.
Furthermore, while a lot has been done by all my predecessors towards achieving the core objectives of the Chamber, I am prepared to build on their worthy legacies by pushing the frontiers as regards strengthening the effectiveness of the LCCI advocacy and research activities to create a more conducive environment for investors.
We will also work towards putting in place strategic innovative programmes to attract and retain more members across sectors. In fact, since my assumption of office, quite a number of people have shown interest in joining the Chamber.
Also, we will diversify our trade fairs and exhibitions to cover more sectors and specialised exhibitions thus making it the best in Africa.
We aim to consolidate on the landmark achievements of our training arm through which we embark on capacity building for Small and Medium Enterprises.
We are looking at improved close collaboration and partnership with federal and state governments as well as the private sector to improve the business environment.
Ogun Records N13.3B Internally Generated Revenue Monthly in Q1 of 2021
Ogun State Government has recorded an average of N13.3billion monthly as Internally Generated Revenue (IGR) in the first quarter of 2021.
The government said it is also planning to raise its yearly Gross Domestic Product (GDP) rate from the current single digit by 25 percent.
The Commissioner for Finance, Dapo Okubadejo disclosed this to newsmen in Abeokuta ahead of the state’s investment summit tagged: ‘OgunIseya21: Becoming Africa’s Model Industrial and Logistics Hub’, slated for July 13th-14th, 2021.
Okubadejo who doubles as the State’s Chief Economic Adviser noted that the state’s IGR had experienced an upward movement after last year’s shortfall due to the Covid-19 pandemic and the attendant lockdown.
“We had a significant turnaround in the first quarter of this year. In fact, as of April, we have done almost N40bn in the Internally Generated Revenue. Our target this year is to exceed all the previous records we have set in IGR. That’s why we have put in place, all these transformation initiatives, friendly policies and also facilitate this investment summit to further showcase Ogun State as the preferred industrial destination,” he said.
The Finance Commissioner was supported in highlighting the investment potentials of the summit by his counterparts from the Ministries of Industry, Trade and Investment, Mrs. Kikelomo Longe; Works and Infrastructure, Ade Adesanya; Culture and Tourism, Toyin Taiwo; Budget and Planning, Olaolu Olabimtan and the Director-General, Public-Private Partnership, Dapo Oduwole.
Unemployment To Push More Nigerians Into Poverty – NESG
On Friday, The Nigerian Economic Summit Group said that many more Nigerians are expected to fall into the poverty trap amid rising unemployment in the country.
The NESG, a private sector-led think-tank, noted in its economic report for the first quarter of 2021 that the country’s economic growth in the period under review was relatively weak.
It said, “Nigeria’s economic growth trajectory is better described as jobless and less inclusive even in the heydays of high growth regime in the 2000s.
“While the Nigerian economy recovered from the recession in Q4 of 2020, the unemployment rate spiked to its highest level ever at 33.3 percent in the same quarter.
“With the COVID-19 crisis heightening the rate of joblessness, many Nigerians are expected to fall into the poverty trap, going forward.”
The group noted that the World Bank estimated an increase in the number of poor Nigerians to 90 million in 2020 from 83 million in 2019.
“This corresponds to a rise in headcount poverty ratio to 44.1 percent in 2020 from 40.1 percent in 2019. The rising levels of unemployment and poverty are reflected in the persistent insecurity and social vices, with attendant huge economic costs,” it said.
According to the report, huge dependence on proceeds from crude oil, leaving other revenue sources unexplored, indicates that Nigeria is not set to rein in debt accumulation in the short to medium term.
The NESG noted that public debt stock continued to trend upwards, with a jump from N7.6tn ($48.7bn) in 2012 to N32.9tn ($86.8bn) in 2020.
It said public debts grew by 20 percent between 2019 and 2020, adding, “This is partly due to the need for emergency funds to combat the global pandemic and alleviate its adverse economic impacts on households and businesses.”
According to the group, Nigeria needs more than an economic rebound, and there is a need to improve growth inclusiveness.
It said, “Nigeria has struggled to achieve inclusive growth for many decades. Since recovery from the 2016 recession, the economy has been on a fragile growth path until it slipped into another recession in 2020 due to the COVID-19 pandemic.
“This suggests that the country needs to attain high and sustainable economic growth to become strong and resilient.
“The relationship between economic growth and unemployment rate in Nigeria suggests that economic growth has not led to a reduction in the unemployment rate – jobless growth.”
The NESG said to reverse this recurring trend, there was an urgent need for collaborative efforts between the government and relevant stakeholders towards addressing the constraints to value chain development in high-growth and employment-elastic sectors, including manufacturing, construction, trade, education, health and professional services, with ICT and renewable energy sectors as growth enablers.
It noted that despite the re-opening of the land borders that the Nigerian government shut since October 2019, inflation reached a four-year high of 18.1 percent in April 2021.
“While we expect improved agricultural production in coming months to partially ease inflationary pressures, this positive impact could be suppressed by recurring key structural bottlenecks including insecurity in the food-producing regions, electricity tariff hike, fuel price increase and hike in transport and logistic costs,” it added.
IMF Queries FG Strategies On Fuel Subsidy, Unemployment, Inflation
The International Monetary Fund has raised the red flag over Nigeria’s resumption of petrol subsidy payments, describing it as injurious to the economy.
It also reiterated the importance of introducing a market-based fuel pricing mechanism and deployment of well-targeted social safety nets to cushion any adverse impact on the poor.
In a report produced after a virtual meeting with Nigerian authorities from June 1 to 8, the IMF also expressed concerns over the rising unemployment and inflation rates, even as it admitted that real Gross Domestic Product was recovering.
The IMF team, led by Jesmin Rahman, further hailed the Central Bank of Nigeria for its efforts at unifying the exchange rate by embracing needed reforms.
The Fund said: “Recent exchange rate measures are encouraging, and further reforms are needed to achieve a fully unified and market-clearing exchange rate.
“The resurfacing of fuel subsidies is concerning, particularly in the context of low revenue mobilisation.
“The Nigerian economy has started to gradually recover from the negative effects of the COVID-19 global pandemic. Following sharp output contractions in the second and third quarters, GDP growth turned positive in Q4 2020 and growth reached 0.5 percent (y/y) in Q1 2021, supported by agriculture and services sectors.
“Nevertheless, the employment level continues to fall dramatically and, together with other socio-economic indicators, is far below pre-pandemic levels. Inflation slightly decelerated in May but remained elevated at 17.9 percent, owing to high food price inflation. With the recovery in oil prices and remittance flows, the strong pressures on the balance of payments have somewhat abated, although imports are rebounding faster than exports and foreign investor appetite remains subdued resulting in continued FX shortage.
“The incipient recovery in economic activity is projected to take root and broaden among sectors, with GDP growth expected to reach 2.5 percent in 2021. Inflation is expected to remain elevated in 2021, but likely to decelerate in the second half of the year to reach about 15.5 percent, following the removal of border controls and the elimination of base effects from elevated food price levels.”
The IMF also recognised that tax revenue collections were gradually recovering but noted that with fuel subsidies resurfacing, additional spending for COVID-19 vaccines and to address security challenges, the fiscal deficit of the Consolidated Government is expected to remain elevated at 5.5 percent of GDP.
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