Organized Private Sector (OPS) has cautioned the Federal Government over slash in 2020 budget by N1.5 trillion. The group, under the aegis of Nigeria Employers’ Consultative Association (NECA), urged the government to ensure that the reduction comes from recurrent expenditures rather than capital expenditures.
While OPS commended the government’s efforts at protecting Nigerians and also keep economic activities going, the group said it was time for the government had deliberately curb wastes and institutionalize a roadmap for the rapid diversification of the economy.
Specifically, they maintained that expenses that will not contribute to national development should be focal points at this time, even as they urged that greater effort should be made to mobilize Nigerians to support their efforts.
Director-General of NECA, Timothy Olawale, who also commended the Central Bank of Nigeria (CBN) for the bold step taken to aid the survival of businesses and the economy at large through the fresh N1.1 trillion interventions for critical sectors, said the step is consistent with global economic practices and would help the economy to stabilize while ensuring improved economic activities.
While giving insights on areas where the stimulus should be deployed, the NECA boss averred that the government should consider funding for infrastructure projects that would improve access to markets for farmers and SMEs as well as reduce the operational costs to increase non-oil exports.
According to him, the real sector should also be urgently supported to improve capacity utilization and create jobs. From recent realities, he said the need to support the health sector; especially local drug manufacturing companies and health laboratories should be taken into cognizance.
He said: “The impact of the coronavirus across over 100 countries have affected global supply chains, as well as demand for goods and services. Commodity prices have also been affected, as crude oil prices have plummeted. The stimulus by the CBN, if strategically deployed will not only keep the wheel of economic activities going but will also protect jobs and stop the slide in recession.”
Meanwhile, on the reduction in the price of Premium Motor Spirit (PMS), otherwise known as petrol to N125, NECA urged that government should allow the international price of crude to determine the prices of the product in Nigeria, and the template should be flexible to accommodate changes as it might occur.
The association expressed that the price of petrol and other petroleum products could have been much lower if the pricing template had been rigorously followed and applied.
They cautioned that the shortfall in oil prices should not be a license to further mortgage the future of the nation with borrowing as the Budget is already struggling under the weight of debt service.
They also called for caution, noting that Nigeria operates a mono-economy hinged on oil and urged the government to ensure total eradication of the subsidy regime in whatever form in the country.