By Chukwuma Umeorah
The Nigeria’s Employers Consultative Association (NECA) has expressed concerns over the nation’s rising inflation and huge debt ratio which has continued to impact negatively on organised businesses, weaken the economy and hinder national development.
NECA while reviewing the nation’s economic performance at its 66th Annual General Meeting in Lagos, yesterday, stated that inflation rate, exchange rate and interest rates which share a triadic association were critical to investment determination of the country and that the recent statistics were not encouraging for investors and businesses.
It noted that according to the National Bureau of Statistics (NBS), “Annual average inflation settled at 21.47 percent in 2022, up from 15.63 percent recorded in 2021. Since the beginning of 2023, inflation has continued to accelerate, reaching 22.22 percent in April and 22.41 percent in May 2023.”
Stating that the steady rise in inflation rate had the tendency to erode consumer real income and effective demand, shrink the working capital of businesses due to increased cost, deter business expansion, reduce business confidence and discourage potential investments.
The Association also expressed concerns over the nation’s public debt which has risen astronomically in recent years reaching N46.25 trillion in December 2022. “Total external debt stock stood at $41.7 billion, while domestic debt stock was N27.55 trillion (sub-national debts inclusive) according to the Debt Management Office. Again, with debt service to revenue ratio reaching 115 per cent in 2022, the country may be heading for debt overhang,” NECA warned.
The President of NECA, Taiwo Adeniyi, stated that “these factors coupled with certain faulty policy implementation have discouraged inflow of foreign investment and further dampen domestic investments. In addition, there is the continued desertion of key government assets with potential to improve the treasury coffers.”
He therefore advised Government to look in the way of implementing policies to manage its debt, such as widening its fiscal net through incentives that would encourage voluntary tax remittances, block leakages in governance, privatise or sell-off government-owned abandoned and non-performing assets.
While reiterating commitment to fulfilling its core mandate of protecting the rights of organized businesses and influencing the socio-economic policies, NECA commended the recent policy moves by the government but stated that more efforts was needed in the areas of Insecurity, energy/power supply, infrastructure FX availability and macroeconomic stability to boost the growth of organized private sector.
“We intend to further deepen our collaboration and advocacy engagements with government at all levels for the good of our nation and the promotion of enterprise competitiveness.”
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