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AfCFTA: Nigeria’s Economy Fragile, Not Competitive, Says NECA

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  • AfCFTA: Nigeria’s Economy Fragile, Not Competitive, Says NECA

The Nigeria Employers’ Consultative Association said on Wednesday that Nigeria took great risks by signing the controversial African Continental Free Trade Area Agreement.

The Director-General, NECA, Mr Timothy Olawale, said this on Wednesday while fielding questions from the State House correspondents after the leadership of the association had met with President Muhammadu Buhari at the Presidential Villa, Abuja.

This came on the heels of the association’s 62nd Annual General Meeting held in Lagos on Tuesday, where it lamented that some government agencies were frustrating the ease of doing business in Nigeria through what it termed their contradictory regulations.

President Muhammadu Buhari had signed the AfCFTA agreement in Niamey, Niger Republic, on July 7, 2019, making Nigeria the 53rd country to do so.

Incidentally, NECA was one of the associations the Federal Government consulted before it arrived at the decision that Nigeria should join AfCFTA.

But, the group warned that one major negative implication was that AfCFTA would turn Nigeria into a dumping ground for all manner of goods.

It also observed that the Nigerian economy, lacking in key infrastructure, was too fragile to withstand competition from other countries, while it also kicked against the plan by the Federal Government to raise Value Added Tax.

Olawale noted that the economy was already weighed down by multiple taxation and could not absorb more taxes.

Speaking specifically on the implications of joining the AfCFTA, he said, “The African Continental Free Trade Area agreement is laudable. There are lots of benefits inherent in it. We also know that it is capable of engendering capital in flow into the country.

“However, before we start talking about benefits derivable from it, we must also talk of the likely damage it can do to an economy that is fragile like ours, which behoves on us as stakeholders and government to put all hands on deck to address those issues.

“Those issues border on those variables that will ensure the competitiveness of Nigerian businesses and industry. We don’t want a situation where our business are not competitive due to the disadvantaged environment they operate. Of course, we are all familiar with the disadvantaged environment with regards to issue of infrastructure, among which is power and the issue of road network – that is, transportation for goods and services and accessibility to the different business environments.

“What we are saying is that if all these issues are not addressed properly, to make our business competitive, definitely we are going to be at the receiving end, to the extent that our nation will become a dumping ground. Some of the factories that are even struggling presently may end up folding up.

“Of course, we know the history of the textile sector and that can be repeated in any other sector and we don’t want us to get to that extent. That is why we are saying government should put mechanisms in place to address these issues, so that we can be competitive and take our rightful place by maximising the benefits of the AfCFTA.

On taxation, Olawale insisted that the association would not support any increase in taxes, adding that NECA told Buhari its stance at the meeting.

He added, “Basically, what we told the President is what we have repeated over and over again in the public domain; that there is no basis for increase in taxation. As it is, organised business concerns are already being overburdened with all sorts of taxes and levies.

“As a matter of fact, we have calculated 105 different taxes and levies we are paying as we speak, which are cumbersome and burdensome. So, we had advised that rather than resort to any form of increase in taxation, what government should be looking at is putting mechanisms in place to widen the tax net in such a way that almost 65 per cent of non-compliant tax payers are captured in the tax net. That way, more revenue will accrue into the coffers of the government.

“We specifically also voiced our concern with the suggestion and proposal out there that Value Added Tax should be increased. We have advised government that if it comes to be, it will reduce the purchasing power of Nigerian workers as well as the poor masses that the President is working hard to improve their lot.”

Reading NECA’s address at the AGM, its second Vice-President, Mauricio Alarcon, noted that President Buhari’s administration set up the Presidential Enabling Business Environment Council to make the country a progressively easier place to start and grow business, but noted that three years after its formation, it had failed in its mandate.

He said while it was striving to make Nigeria a progressively easier place to start and grow business, activities of some regulatory agencies were in sharp contrast to the ease of doing business mantra of the government.

He said, “Three years into PEBEC’s existence, it is arguable if it is achieving its mandate. As businesses, we identify with PEBEC and the revolutionary assignment that was bestowed on it. However, we are concerned with the contradictions between the mandate of PEBEC and the actions of some regulatory agencies of the same government.

“While PEBEC is striving to make Nigeria a progressively easier place to do and grow business, activities of some regulatory agencies are a sharp contrast to the ease of doing business mantra of the government.”

However, Buhari assured the group that his administration would implement more policies to improve on the ease of doing business in the country.

“We also implemented various policies and programmes to support job creation in agriculture, mining and other key sectors. We also invested in infrastructure projects especially, transportation and power sectors.

“Nigeria is a blessed country with abundant resources. We have all it takes locally to meet our most basic needs. Our history of unnecessary importation of the most basic items meant we were exporting jobs to other countries at the expense of our own citizens”, he stated.

The President informed the group that his administration was working on bringing back all lost jobs to the country.

“This administration is determined and taking steps to bring these jobs back to Nigeria. Our policies are simply designed for that,” he added.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

NNPC Supplies 1.44 Billion Litres of Petrol in January 2021

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The Nigerian National Petroleum Corporation (NNPC) supplied a total of 1.44 billion litres of Premium Motor Spirit popularly known as petrol in January 2021.

The corporation disclosed in its latest Monthly Financial and Operations Report (MFOR) for the month of January.

NNPC said the 1.44 billion litres translate to 46.30 million litres per day.

Also, a total of 223.55Billion Cubic Feet (BCF) of natural gas was produced in the month of January 2021, translating to an average daily production of 7,220.22 Million Standard Cubic Feet per Day (mmscfd).

The 223.55BCF gas production figure also represents a 4.79% increase over output in December 2020.

Also, the daily average natural gas supply to gas power plants increased by 2.38 percent to 836mmscfd, equivalent to power generation of 3,415MW.

For the period of January 2020 to January 2021, a total of 2,973.01BCF of gas was produced representing an average daily production of 7,585.78 mmscfd during the period.

Period-to-date Production from Joint Ventures (JVs), Production Sharing Contracts (PSCs) and Nigerian Petroleum Development Company (NPDC) contributed about 65.20%, 19.97 percent and 14.83 percent respectively to the total national gas production.

Out of the total gas output in January 2021, a total of 149.24BCF of gas was commercialized consisting of 44.29BCF and 104.95BCF for the domestic and export markets respectively.

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Economy

NNPC Says Pipeline Vandalism Decrease by 37.21 Percent in January 2021

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The Nigerian National Petroleum Corporation (NNPC) said vandalisation of pipelines across the country reduced by 37.21 percent in the month of January 2021.

This was disclosed in the January 2021 edition of the NNPC Monthly Financial and Operations Report (MFOR).

The report noted that 27 pipeline points were vandalised in January 2021, down from 43 points posted in December 2020.

It also stated that the Mosimi Area accounted for 74 percent of the total vandalised points in Janauray while Kaduna Area and Port Harcourt accounted for the remaining 22 percent and 4 percent respectively.

NNPC said it will continue to engage local communities and other stakeholders to reduce and eventually eliminate the pipeline vandalism menace.

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Economy

Nigeria’s Food Inflation Hits 22.95 Percent in March 2021

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Food inflation in Africa’s largest economy Nigeria rose by 22.95 percent in March 2021, the latest report from the National Bureau of Statistics (NBS) has shown.

Food Index increased at a faster pace when compared to 21.70 percent filed in February 2021.

Increases were recorded in Bread and cereals, Potatoes, yam and other tubers, Meat, Vegetable, Fish, Oils and fats and fruits.

On a monthly basis, the food sub-index grew by 1.90 percent in March 2021. An increase of 0.01 percent points from 1.89 percent recorded in February 2021.

Analysing a more stable inflation trend, the twelve-month ended March 2021, showed the food index averaged 17.93 percent in the last twelve months, representing an increase of 0.68 percent when compared to 17.25 percent recorded in February 2021.

Insecurities amid wide foreign exchange rates and several other bottlenecks that impeded free inflow of imported goods were responsible for the surged in prices of goods and services in March, according to the report.

The Central Bank of Nigeria-led monetary policy committee had attributed the increase in prices to scarcity created by the intermittent clash between herdsmen and farmers across the nation.

However, other factors like unclear economic policies, increased in electricity tariffs, duties, subsidy removal and weak fiscal buffer to moderate the negative effect of COVID-19 on the economy continue to weigh and drag on new investment and expansion of local production despite the Federal Government aggressive call for improvement in domestic production.

Nigeria’s headline inflation rose by 18.17 percent year-on-year in the month under review.

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