‘Wrong policy choices cast strain on ailing economy’
The Nigeria Economic Summit Group (NESG), has urged the Federal Government to always consider the implications of its economic policy choices, stating that wrong choices cast a strain on an ailing economy.
In its latest Economic Outlook, the Group noted that some policy choices have a lingering impact on the economy even if they are eventually reversed.
The group specifically identified the closure of land borders as one of such policies that ended up exacerbating the country’s economic challenges.
Consequently, the NESG urged the government to always liaise with relevant stakeholders, for a proper assessment of prevailing situations, before taking policy decisions.
Recall that local manufacturers and members of the Organised Private Sector (OPS), had kicked against the border closure, citing a lack of strategy in the implementation and expected outcome.
“Wrong policy choices cast a strain on an ailing economy. Even before the outbreak of COVID-19, the implementation of land border closure resulted in a decline in earnings from non-oil exports.
“This policy decision reversed the few gains made in the last couple of years and further exacerbated the challenges facing the economy.
“In addition to a sharp and consecutive increase in prices, the inflation rate rose from 11 per cent in August 2019 to 14.9 per cent in November 2020. The economy has recorded consecutive trade deficits since the fourth quarter of 2019.
“The closure was a heavy policy decision that required the input of the private sector, especially given its implications on businesses, both formal and informal players,” it said in the 2021 report.
NESG Chairman, Asue Ighodalo, also urged the Federal Government to take more interest in promoting the country’s non-oil exports to reap maximum benefits from the African Continental Free Trade Area (AfCFTA) agreement.
Ighodalo said Nigeria needed to create innovative economic ideas that could spur growth and prosperity.
He said the country should encourage non-oil exports to improve export earnings and reduce pressure on the external reserves.
”Nigeria is at a crossroads and cannot afford the business-as-usual approach, which will only lead to further job losses, pull millions of citizens into poverty and worsen an already fragile economy.
“Promoting non-oil exports will become an imperative if Nigeria is to benefit maximally from AfCFTA,” he added.
The Group, however, commended the Federal Government for taking some hard policy decisions that would impact positively on the economy in the long run.
“Nigeria has implemented some tough reforms in 2020, such as the removal of fuel and electricity subsidies and a massive programme on harmonisation of citizen’s data.
“These must be consolidated with swift implementation of security reforms and sanitising the business environment, both of which are crucial in attracting investments into critical sectors of the economy.
“In addition, state governments must be given legislative and policy support to explore the opportunities and resources in their respective states. The urgency of these reforms must be prioritised, going into the next decade,’’ it advised.