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Bimbola Oyesola and Adewale Sanyaolu
Reacting to the recession projection by the International Monetary Fund, (IMF), the Nigeria Employers Consultative Association (NECA) noted that in the short term, Nigeria needs greater fiscal space to boost its health infrastructure to contain the spread of COVID-19, support the sectors worst hit and stimulate domestic consumption.
NECA director general, Timothy Olawale also urged the Central Bank of Nigeria to cut interest rates and channel liquidity to firms and households to kickstart the economy.
“There is need to provide a series of economic policy options to target households and businesses,” he said.
He noted that with the current challenges in generating revenue to sustain the national budget, due to the drop in price of crude oil globally, the Federal Ministry of Finance, should push for better debt relief as part of measures to get the economy back on track as soon as possible.
For businesses to survive, Olawale said NECA is proposing tax relief specific to industries, suspension of the 2.5 per cent increase in Value Added Tax, for the rest of 2020, reduction in Company Income Tax (CIT) from 30per cent to 20 -15per cent for 2021.
He said, “Key sectors that would be mostly affected, like hospitality, tourism, aviation, entertainment should be provided specific stimulus packages to bounce back from the rubbles, to guarantee functioning of the essential sectors.
“For workers who lost their jobs as a result of the pandemic, Federal Government should provide emergency income grant to as palliative.”
Also commeneting on the proposal, a member of Central Bank of Nigeria (CBN) Monetary Policy Committee and Director Centre for Energy and Petroleum Economics, University of Ibadan, Prof Adeola Adenikinju, said the warning by IMF remained worrisome for the country.
He urged the government to urgently put some medium term measures in place in order to rebound the economy.
He said part of those efforts to rebound the economy would be for the country to begin to add value to its oil.
In his reaction, Managing Director of Cowry Assets Limited, Mr. John Chukwu, said the IMF projection is predicated on the fact that the country does not have the internal resources to cushion the effect of what it is going through with crash in oil prices
Chukwu said what the country should be doing to moderate the impact of the pandemic on the economy is to attract foreign capital.
He advised that Federal Government should quickly pass the Petroleum Industry Bill (PIB) so that it could change the ownership of the oil sector by turning them into Incorporated Joint Venture (IJV).
