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NESG Issues Statement on the State of Nigeria’s Economy

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The Nigeria Economic Summit Group (NESG) today issued a 15-point statement on the state of nation’s economy covering key sectors.

The statement was signed by its Chairman Mr Asue Ighodalo and Chief Executive Mr Laoye Jaiyeola.

This is a copy of the NESG’s Statement:

  1. The Nigerian Economic Summit Group (NESG) notes that since the inception of this Administration, Agriculture and the need to ensure Zero Hunger for Nigerians has received considerable attention. However, despite the budgetary allocations and huge sums of money disbursed by the Central Bank of Nigeria (CBN) through the Anchor Borrowers’ Programme, a huge gap remains in meeting the food requirements, which has resulted in increasing hunger among the Nigerian populace. Evidently, the issues are beyond money and therefore, require a complete overhaul of the management of, and support for the Agriculture sector and all related sectors – with a view to getting more value for our investments.
  2. The NESG expresses its concern about the high level of insecurity across the country and its impact on the business environment and investment flows, which has contributed massively to the current food crisis, unemployment, poverty, increasing community clashes, rising bloodshed and the absence of peace and tranquillity in the land. Therefore, we again join the call by all well-meaning Nigerians, for Government to critically re-evaluate our security architecture and take all necessary actions to assure and safeguard the safety of all Nigerian citizens and residents.
  3. The NESG acknowledges the expected far-reaching positive impact of the recently enacted Companies and Allied Matters Act (CAMA) 2020 on businesses especially the Micro, Small and Medium Enterprises (MSMEs) if well implement-ed. However, we have noted the issues being raised by some stakeholders about the provisions of certain sections of the Act, and urge all concerned to follow due process in seeking review and then be given fair hearing such that the many proactive provisions in the law that would facilitate the ease of doing business, provide efficient corporate structures and a stable/certain business climate are not drowned out but are well communicated, optimised and implemented.
  4. The NESG notes the Nation’s huge exposure to the vagaries of oil price fluctuations and emphasizes the need for a better structured and effective diversification of the economy. However, the NESG is not oblivious to the continuing crucial role of the Oil and Gas sector in our economy. Accordingly, we applaud the work now being done by the Presidency to see to the quick passage of the Petroleum industry Bill (PIB), and urge further stakeholder consultations so that the resultant law will create the required enabling environment for investment flows, reserves enhancement, technology transfer and utilization efficiency.
  5. The NESG notes the evolving developmental roles of central banks around the world especially as it concerns resource allocations. However, such allocative roles must be undertaken in a very open, transparent and fair manner. The Group expresses serious concerns about how the Central Bank of Nigeria (CBN) has carried on the business of foreign exchange transactions, loan disbursements (intervention funds) and price fixings without appropriate policy clarity. This can be subject to abuses, manipulations and significant market disruptions, reflective of a policy akin to crony capitalism. We therefore respectfully request the appropriate authorities to properly review this policy to restore credibility into our financial sector.
  6. The NESG has expressed severe concerns about certain provisions of the ‘repealed and re-enacted’ Bank and Other Financial Institutions Act 2020; recently passed by both houses of the National Assembly, and in the process of being transmitted to the President for assent. The Bill contains certain provisions which breach the provisions of the Nigerian Constitution, confers immunity on CBN officials and exempts actions by the CBN from judicial review. These are draconian, totalitarian and inimical to the development of a stable and transparently regulated financial sector. We respectfully request that the President should please withhold his assent until the Bill is properly reviewed, amended and is made fit for purpose. We also most respectfully request that our legislative houses should subject all Bills, in particular, such crucial bills, to the most efficient scrutiny necessary to assure compliance with the Nigerian Constitution, transparency, good governance and the best interest of the people of Nigeria.
  7. The NESG observes with concern some distortions in the liquidity and interest rate management of our financial system which has resulted in rate distortions causing grave disadvantage to domestic investors and pensioners. This will occasion major disincentives to savings and investments and thereby, be a disadvantage to Nigerian pensioners and long term savers. This is inimical to this administration’s concern for the elderly, the weak, the infirmed and those who had served this Country meritoriously in their prime. It must be stressed that our country needs to mobilise domestic savings and investments even as we seek to attract foreign investment and we should be careful not to initiate policies that appear to discriminate against or discourage domestic savings and investors.

Policies making average Nigerians poorer by the day should not be encouraged.

  1. The NESG commends Government’s efforts on infrastructural developments across the country and respectfully advises that given the enormity of financial resources required to meet our largely decayed infrastructural stock, many more options should be explored to attract private sector capital and involvement. However, such options and alternatives must always be subject to clear rules, open, trans-parent, following due process, and the enshrinement of the sanctity of contracts.
  2. The Group acknowledges government effrts at reopening the eastern port and urges that the rail link between Onne and Port Harcourt, should be given urgent attention so as to avoid replicating the Apapa Port experience. In the same light we wish to call for urgent solutions to the Apapa Port congestion, and other difficulties in effecting prompt and efficient export and import of goods. The Seaport is an economic lifeline critical for the diversification of the Nigerian economy.
  3. The NESG commends government’s actions at deregulating fuel and electricity prices and urge that proper policies, processes and procedures be put in place, to ensure that all the reforms (beyond price deregulation) necessary to facilitate the smooth functioning of both the fuel and electricity markets are effectively and conclusively implemented. Adequate communication to stakeholders and the general public on the benefits derivable from these actions must also be regularly carried out.
  4. The NESG urges the Federal Government to expedite actions at re-opening our closed borders given its negative impact on trade and employment. It must be noted that our work in ECOWAS should not be limited to security and diplomacy, but must also effectively harness trade opportunities within the sub-region. We also call on the government to ratify the African Continental Free Trade Agreement (AfCFTA), so that we can move to full membership status and take our rightful place in subsequent negotiation rounds. We remain of the firm belief that with the necessary infrastructure, Nigerian economy and the Nigerian people, with our innovative capacity, hard work and creativity, will be one of the greatest beneficiaries of African and West African free trade. This will also enable fair competition, competent institutions, effciency and transparency in our processes.
  5. The NESG notes with grave concern the rising level of poverty, unemployment and underemployment in our country which is predominant among our young people and has been exacerbated by the impact of COVID-19 and the slump in commodity prices. We urge that while efforts at creating short-term jobs across the country is commendable, a lot more effort must be channeled towards re-skilling, retooling and reviewing our school curriculum. A focused approach to vocational studies must also be undertaken, and all our 13.2M children (Pre COVID-19) out of school must be brought into the school system.
  6. We note the nation’s resort to borrowing (either domestic or international), and quantitative easing by the monetary authorities to fund the large deficit which has now been made worse by the impact of the COVID-19 pandemic. Since these specific actions are not sustainable in the medium to long term, the Group urges government to urgently, consider a strong communicating strategy that engages the people and prepares them for tougher times ahead whilst the current reforms take effect.

The current business as usual disposition is not sustainable.

  1. The NESG notes the frequent expression by government to work with the private sector in nation building efforts, but observes that a lot more work needs to be done on both sides to obtain the best benefits of such collaboration. It is therefore important that concrete steps must be taken to address the mutual distrust and build institutions that work regardless of persons.
  2. In consonance with our strong commitment to partner with government in ensuring an appropriate, efficient and transparent environment for doing business in our country, the NESG pledges its commitment and the commitment of its other private sector counterparts to work effectively and transparently with government in combating these challenges, and thereby assure a growing, strong, vibrant effcient, inclusive, secure and healthy economy. All hands must be on deck in collaboration, as we work hard and without prejudice to achieve the Nigeria of our dreams.

We have no other nation that we can call our own.

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