Mohammed Shosanya
The Chief Executive Officer, Centre for the Promotion of Private Enterprise (CPPE),Dr. Muda Yussuf,has advised the Federal Government to consider fiscal policy protection of the nation’s energy sector.
Yussuf,in a statement made available to Premium News on Sunday, said the development was necessary to promote energy security and incentivize private investments in the sector.
He also emphasized the need for fiscal policy protection to support domestic investments in petroleum refineries to conserve foreign exchange, create jobs, and deepen backward integration.
According to him,the country needs executive orders for agriculture, agrochemicals and Agro-allied industries to curb the surging food inflation, adding that the Iron and steel sector needs the fiscal protection to aid the construction industry and reduce construction costs for housing and infrastructure.
He commended the recent executive order removing import duties , VAT, Excise duty on pharmaceutical raw materials, intermediate products, medical diagnostic equipment and machineries.
These fiscal policy measures,he said,would boost domestic production of pharmaceutical products, reduce the cost of medications, improve access to healthcare and impact positively on the well-being of citizens.
He said,it would also revitalize our pharmaceutical industries and create more jobs.
He also said,fiscal policy measures have much better prospects of addressing supply side challenges in the economy, if well targeted.
Boosting production is very vital to fixing the current inflationary pressures, driven largely by supply side challenges in the economy,adding that fiscal policy measures are potent tools for the realization of this objective.
He said:”There is a groundswell of economic nationalism globally and we should respond by strengthening our domestic production capabilities across all sectors. Fiscal policy measures have proven to be more impactful on real sector performance than monetary policy. The real sector of the economy deserves to be effectively protected and incentivized to improve production and ensure sustainability investments in that space.
“The Nigeria economy cannot afford to submit to a regime of complete trade liberalization in the light of the challenges faced by domestic manufacturers. We need to stem the tide of deindustrialization of the Nigerian economy, the exit of foreign direct investors and the rising mortality rate of domestic industries.
” We believe that stepping up fiscal policy interventions would facilitate the realization of this objective. But we must be ready to trade off some revenue in the short term. The economy would be better off in the medium to long term, with regard to growth in domestic production, less import dependence, heightened prospects of disinflation, higher job creation and better economic resilience”.
Commending the Central Bank of Nigeria for scrapping of its Price Verification System Portal, Yussuf urged the CBN to sustain its engagement with the private sector for quality, evidence-based feedback on monetary policy outcomes.
He emphasized the need to identify other overlapping regulatory functions which had continued to constitute impediments to domestic and foreign investments.
He said it was imperative to ensure effective implementation of Executive order 003 which prescribes that preferences must be given to local manufacturers of goods and service providers in the public procurement of goods and services by the MDAs.
He appeals to the presidency to ensure compliance by the MDAs with these executive orders in the spirit of current efforts to boost domestic production, grow domestic talents and reform the economy.