The Nigerian Employers Consultative Association says available indices indicate that the country is still experiencing economic recession.
It, therefore, insisted that major policy responses must ensure robust and sustainable growth, including effective implementation of the Economic Recovery and Growth Plan.
The President, NECA, Mr. Larry Ettah, who spoke with our correspondent, on Friday, called on Nigerians to disregard the National Bureau of Statistics’ report for the second quarter released on September 5, which showed the country was out of recession.
He also said that even the NBS report was replete with negative figures showing challenges in most economic sectors such as manufacturing, trade, telecommunications, hotels and restaurants, construction, real estate, transport and professional services.
“It also showed the poor state of the country’s social sector, as revealed by the recession in both education and health. It is clear that policy responses are yet to clear these unfortunate trends,” Ettah said.
Reviewing the NBS report, the NECA president said that while it was positive that headline year-on-year inflation had moderated from a peak of 18.72 per cent to 16.05 per cent largely due to base effects (high base occasioned by shock to energy prices in 2016), “several components of inflation still remained uncomfortably high.”
The other components that remained high, he said, were “clothing and footwear (15.8 per cent), education (15.0 per cent), imported foods (14.1 per cent), furnishings and household equipment maintenance (12.3 per cent), transport (11.7 per cent) and health (10.3 per cent).”
According to him, the review of the NBS data on Gross Domestic Product shows that the marginal growth of Q2 2017 is weak and fragile.
“Additional measures were required to ensure growth is sustainable and the economy does not relapse into recession.
“We recommend very strong and concerted implementation of the ERGP in order to boost confidence of both local and international investors in the Nigerian economy and generate additional investment, which appears critical to building a sustainable recovery,” Ettah said.
He also said, “We note that against our population growth rate of 3.2 per cent, any GDP growth lower that two per cent makes no dent in Nigerian poverty, unemployment and inequality and is insufficient to ensure business growth and profitability.
“We urge economic planners to adopt measures to attain the ambitious growth targets stated in the ERGP. Already, we fear that the 2.19 per cent growth target in the ERGP for 2017 appears unattainable,” he said.
Ettah said the opinion of NECA was that the government needed to “adopt specific, targeted and effective policies to attract and promote private capital investment in the Nigerian economy, especially into infrastructure and industry,” adding that thus far, it did not appear that the rhetoric in the ERGP to make markets work and leverage private capital as the engine of growth had been matched by appropriate policy responses.
“With regard to inflation, we are worried by the continued rise in food prices with domestic food inflation reaching 20.3 per cent in July 2017, according to the NBS data. We suspect this trend is connected to conflicts between herdsmen and farmers in vast areas of Nigeria’s North-Central region, the food basket, alongside forex conditions making food attractive, thereby exacerbating local scarcity,” he said.
He added, “We urge the government to take firm actions to end these conflicts. More so, the recent floods in the region may affect harvest, further worsening the situation.
“We retain the view that domestic interest rates are too high for the productive sector, and monetary policy must abandon its tightening posture to both reduce interest rates and support better GDP growth.”
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