Meanwhile, industry analysts have indicated that those pain points would linger into 2024 before whatever policy change to be introduced by the incoming regime would begin to have any effect.
In their various communications with Financial Vanguard last week, the key OPS groups lamented that the challenges which they had brought to the government’s attention from its inception almost eight years ago were unattended to and in some cases got worse over the years to as it prepares to hand over to the next regime, indicating that their 2023 business operations may brace up for a tougher operating environment until the new government finds its feet.
Pain points
The major headaches to businesses left unattended, according to them, includes, cost push inflationary pressures, multiple taxes, foreign exchange scarcity and exchange rate volatility, supply chain disruptions, funding gaps, poor infrastructure and seaports dysfunction.
Others, according to them, are shrinking fiscal space, soaring public debt, surging energy cost, weakening purchasing power, legacy structural constraints, lingering insecurity, and crippling trade facilitation issues.
One of the leading industrialists told Vanguard last week that they have already met with a frontline presidential candidate to discuss these challenges.
However, as they expect the incoming government to speedily address these challenges, analysts at CardinalStone Research have posited that 2023 will be mostly transitional and gradual policy rollouts, with strategic priorities of the new administration likely to be more pronounced in 2024.
The analysts also said that with few weeks to the general elections, and few months to the handover of power, the economic outlook for the year remains uncertain.
“2023 will be mostly transitional and gradual, with strategic priorities of the new administration likely to be more pronounced in 2024,” they stated.
OPS reactions
Responding to questions from Financial Vanguard, Director General, Manufacturers Association of Nigeria, MAN, Mr. Segun Ajayi-Kadir, said as a way to grow the economy in 2023, government must address structural constraints aimed at reducing the cost of local production.
He stated, “Structural constraints should be addressed to reduce cost of local production, which remains significantly high. There is a need to implement the new cluster industrial framework that allows manufacturers to produce efficiently for domestic consumption and export”.
On the issue of taxes, Ajayi-Kadir said: “Our expectation is that the government will reduce to the barest minimum the incidences of multiplicity of taxes and ensure that only approved taxes/levies/fees are charged; widen the tax net to capture those not currently paying taxes and consider reducing the various tax rates which has been the global trend in recent times to encourage investment inflow, particularly into the manufacturing sector.
“Structural constraints should be addressed to reduce cost of local production, which remains significantly high. There is a need to implement the new cluster industrial framework that allows manufacturers to produce efficiently for domestic consumption and export”.
He added that the dearth of basic infrastructure impedes manufacturing in many ways, saying, “the inadequacy of infrastructure frustrates and makes manufacturing unnecessarily uncompetitive when compared with what obtains in other countries with better infrastructures provided by the government.
“The expectation going forward is that the government will sustain the improved level of infrastructure development and be strategic in choosing projects to ensure that they are cited along the economic hubs within the country and those connecting neighbouring countries,” he said.
The President of the Nigerian Association of Chambers of Commerce Industry, Mines and Agriculture (NACCIMA), Ide John C. Udeagbala, stressed the need for the incoming regime to partner with the private sector in enunciating policies that will enhance feasible solutions to the economic challenges facing the country.
He further stated: “The new year 2023 opens a window for government to appropriately review and jettison policies that have suffocated viable business establishments and have had drawbacks on well-established private companies that are presently struggling.”
Director General, LCCI, Dr. Chinyere Almona, said there is a need for the government to continue to support strategic sectors of the economy with fiscal interventions.
Her words: “In 2023, we need fiscal interventions to support strategic sectors like manufacturing, agriculture, transport logistics, and more allocation of FOREX to productive sectors.
“The Federal Government needs to sustain its targeted interventions in selected critical sectors like agriculture, manufacturing, export infrastructure, tackling insecurity, and free more money from subsidy payments. It is very imperative that we need sound monitoring and evaluation over the budget allocations to capital projects and defense spending to respectively tackle infrastructural deficit and the fight against insurgency.”
Reacting, Dr. Femi Egbesola, President, Association of Small Business Owners of Nigeria (ASBON), said that the federal government should declare a state of emergency on the micro, small and medium enterprises (MSMEs) eco space.
He stated: “Day by day, the economy is nose diving and many businesses are shutting down. This is escalated by the myriads of issues which include but not limited to rising inflation, forex, infrastructure breakdown and deficit, increasing lack of access to finance and market, eroded purchasing power of the average consumer, policy inconsistency and somersaults, rise in cost of fuel and energy, influx of substandard imported products competing with local ones, multiple taxation, etc.
“Going by available indices, the economic future looks gloomy and fearful. Little wonder then, that the recent report of SMEDAN and NBS states that over two million businesses had folded up in the past two years.
“Both present and incoming government must pay critical attention and action on the MSME eco space, and perhaps declare a state of emergency in the sector, for whatever is left to be salvaged and for newer businesses to thrive. This is a matter of utmost urgency.”
In his comment, Director, Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, said it is imperative that the government reform the budget and appropriation processes to prioritise infrastructure financing and human capital development.
His words: “To unlock growth and investment in 2023, the government must undertake some urgent reforms.
“We should reform the budget and appropriation processes to prioritise infrastructure financing and human capital development. This would boost productivity and competitiveness of the economy.”
Yusuf also noted that the maritime sector is a very crucial sector of the Nigerian economy where reform imperatives have become very urgent.
“Legacy trade facilitation issues had persisted and become intractable. There is a pressing need to ease the cargo clearing processes and vessel turnaround time at our ports. These are major components of ease of doing business to which the government had severally expressed commitment,” he stated.
