The incoming Nigerian Presidential administration sworn in on May 29th should focus on Fiscal Consolidation, Foreign Exchange Reform, Trade and tariff, Agriculture, Industrialisation, and financial sector reforms.
This was disclosed by Dr. Muda Yusuf, Director, the Centre for the Promotion of Private Enterprise in a statement viewed by Nairametrics.
He warned that the Nigerian economy is in a stumbling and fragile state and in dire need of a new direction, adding that the political transition offers an excellent opportunity to chart a new course.
Yusuf said the new administration should establish quality economic governance consistent with tested economic principles and empirical evidence, and contextualize within socioeconomic peculiarities. This is critical from the onset of the administration for signaling investors’ confidence, adding:
“ They should set up a Transition Committee on the Economy to come up with propositions of what needs to be done differently and ensure the delivery of quick wins the first month of the administration.
“Technically sound economic team to give guidance and direction on general economic policy direction, policy conceptualization, and urgent reforms.
“Expand the role of markets for value delivery and boosting of private enterprise in the economy. State institutions do not have the capacity to manage enterprises.
The CCPE boss also noted the new admin Tax regime should ensure efficiency in tax administration, reduce tax evasion and tax avoidance and eliminate multiple taxations, he said:
“Elimination of fuel subsidy to save an estimated N7 trillion annually.
“Elimination of foreign exchange subsidy to unlock a minimum of N3 trillion revenue annually from the sale of CBN forex to the official foreign exchange window.
“Unlock more income from revenue generating agencies through enhanced efficiency of their operations.
FOREIGN EXCHANGE POLICY REFORM
He urged the Foreign exchange policy reform should unlock inflows of capital into the economy, reduce arbitrage in the forex market and improve transparency in the forex allocation, saying they should:
“Ensure a market reflective exchange rate to eliminate the distortions in the forex ecosystem.
“Remove impediments to market mechanism in the allocation of forex. This will boost inflows from Foreign Direct Investment [FDI], Foreign Portfolio Investment [FPI], Export Proceeds and Diaspora remittances.
OIL AND GAS SECTOR REFORM
Nigeria’s new President must also demonstrate unmistakable commitment to the implementation of the Petroleum Industry Act, as this would attract more investment into the oil and gas sector., according to CPPE, they added:
“Remove petrol subsidy with minimum shocks to the economy and the citizens.
“A substantive minister of Petroleum Resources should be appointed to promote professionalism and transparency in the sector. The practice of the President assuming the role of Minister of Petroleum should be discontinued.
TRADE AND TARIFF REFORM
On Trade they urged the Tariff regime must adequately protect local industries., adding:
“Import duty on intermediate products and critical industrial inputs should be reviewed to reduce production costs.
“The administration should prioritize trade facilitation and removal of all non-tariff barriers to trade.
“Removal of all customs checkpoints within the country.
“There should be a balance between the revenue and trade facilitation objectives of the Nigeria customs service. There is currently a disproportionate focus on revenue generation.
Dr. Yusuf noted that the Policy on agriculture must be holistic, focusing on the entire value chain, adding that due attention must be given to the cost and availability of inputs, production and productivity, application of technology, logistics and marketing, processing and storage.
He added FG must Strengthen the linkage between agriculture and industry within a sustainable
CPPE urged that the incoming government must ensure liquidity in the foreign exchange market to guarantee access to foreign exchange for the procurement of raw materials and types of machinery for industry.
“Rapid investment in core industries to support backward integration aspirations of the government. Such core industries include iron and steel, petrochemicals, an aluminum smelter, pulp and paper, and refineries.
“Creation of more industrial parks across the country and improvement in the facilities in existing ones.
CPPE says it desires a regulatory environment where regulatory risks and regulatory shocks are at the barest minimum adding that this is necessary to boost investors’ confidence, they said:
“Regulatory institutions and economic players must relate as partners, without necessarily compromising regulatory effectiveness.
“We should put an end to the culture of regulatory intimidation, coercion, and undue harassment.
CPPE also called for Financial Reforms to reposition Nigeria’s banking system to play its fundamental role of financial intermediation for the benefit of investments in the economy.
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