Posted by Amechi Obiakpu, Lagos | 12 August 2016 | 2,312 times
As the nation grapples with economic recession, the Federal Government has been advised to engage in prudent spending in order to get the economy back to track. The advice was given by Segun Oshinowo, Director General of Nigeria Employers’ Consultative Association (NECA).
Oshinowo who said this in a press statement made available to News Express averred that “Government must first accept the basic principle and imperative of prudent spending as a way out of recession.”
Such spending according to the NECA boss should target key social and physical infrastructural development; the settlement of the huge domestic debt and institution of an outcome-based and cash-backed budgetary system for the MDAs.
He commended government’s initiative and effort so far in revamping the country’s economy to stimulate growth, in the face of the global economic downturn but noted that much still needed to be done to rescue the economy from the doldrums in view of the damning effect of the recessed economy, which included: declined capacity utilisation, closure of businesses and high unemployment rate amongst other factors.
Oshinowo stressed the need for government to complement its monetary policy with appropriate fiscal policy such as the abrogation of arbitrary tax waivers/exemptions, deliberate increase of fiscal savings into the Sovereign Wealth Fund, improved tax collection with emphasis on widening the tax net as against introduction of new taxes or increase in VAT, which could further reduce disposable income, slow down growth and lead to disincentive for investment.
Oshinowo applauded the Buhari administration for its drive to diversify Nigeria's economy from its over-dependence on crude oil. He however, added that it should in addition to its focus on agriculture, to take advantage of valuable linkages between oil and related industries through the development of energy intensive industries and those that use by-products derived from oil such as petrochemicals, aluminum, steel production, fertiliser and bio electronics.
The NECA boss also urged the government to consider a resort to private capital mechanisms across sectors such as power, oil and gas, transport and other critical infrastructure to bridge the fiscal gap.