By Bimbola Oyesola
Nigeria Employers’ Consultative Association (NECA) at the weekend raised the alarm that more businesses in the country may close down due to the economic challenges in the country.
This is even as it charged President Muhammadu Buhari’s administration to ensure that the economy does not collapse totally before the end of this administration.
According to the director-general of the association, Mr. Adewale-Smatt Oyerinde, the organised private sector (OPS) is more at the receiving end of the on-going economic challenges arising from inconsistent and poorly implemented policies, which are now forcing Nigerians to contend with multi-faceted problems.
He noted that one worrisome and distinctive feature of recent economic policies remains poor implementation.
“While it is commendable to develop policies and programmes, the implementation of same is as important to the success of the said policies and programmes,” he said.
He reasoned that from the ban of 42 imported items from accessing forex, ban of dairy products, to the closure of land borders and now the redesign of the naira, the trail of poor implementation decisions is palpable and worrisome.
On the myriads of on-going challenges, the NECA DG said it is obvious that the country is not short of good policies, but implementation by relevant authorities remains a challenge. According to him, while the naira redesign is commendable, “the implementation so far is short of commendation”, adding that a policy that was purportedly designed to curb inflation, encourage the cashless culture and foster financial inclusion, among others, is inadvertently pushing many Nigerians into frustration in view of the current epileptic bank transfer/e-payment systems and general inadequacy of online banking infrastructure.
He said, “The current situation portends grave danger for the economy, even as Nigerians do not have access to the new notes, businesses are short of sales and most employees find it difficult to go to work because of lack of cash.
“It is apt to conclude that it could be counter-productive to seek to implement a cashless economy abruptly, when at the same time the new Naira notes are being rolled out in limited quantities within an impracticable timeframe.”
He lamented that as Nigerians grapple with limited availability of cash, they are at the same time confronted with scarcity of Petrol, a product for which trillions of naira is being expended as subsidy, while businesses also continue to face increasing energy cost, inadequate FOREX, high operating cost amongst others.
Oyerinde stated that with the rising inflation and real reduction in purchasing power of the citizens, the nation could be witnessing the death of many Small and Medium Scale businesses and also shutting down of many otherwise large businesses.
On the way out, he advised government to, “as a matter of urgency ensure the availability of the new Naira notes and, prosecute saboteurs, if necessary, to ease the frustration of Nigerians and avert the impending breakdown of law and order.”
He said contrary to the touted narrative, and according to financial experts, Nigeria does not have excessive cash in circulation (it is less than 2% of GDP). “The latest report by the CBN actually shows that currency in circulation is only N3 trillion out of N52 trillion aggregate money supply.”
Stating further that if the Monetary Policy is not working, as it has been observed, it is not because of the N3 trillion out of N52 trillion (which is less than 6%).
He added that making currency scarce only increases the incentive for counterfeiting.
He however called for more immediate and drastic action to ensure adequate supply of petroleum products to cushion the harsh effects of current scarcity. “Making Nigerians to spend hours on queue for a product that the Nation is naturally blessed with, which is also subsidized is not only contradictory, but also shameful”, he said