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Unless the thorny problem of insecurity is resolved, the increase in agricultural production will be insufficient to reduce inflationary pressures, according to the Nigeria Employers’ Consultative Association (NECA).
According to the NECA, despite the Nigerian government’s reopening of land borders, closed since October 2019, inflation reached a four-year high of 18.1% in March 2021.
NECA President Taiwo Adeniyi, in his address to the 64th annual general meeting of the employers’ organization, noted that although Nigerians expect an increase in agricultural production to ease inflationary pressures in the months In the future, the positive impacts could be thwarted by repeating important obstacles such as food shortages, increases in energy prices, increases in fuel prices and increases in transport and logistics costs.
The association also projected a slow but positive growth closure of the economy to 2.2 percent to 2.5 percent.
Adeniyi noted that there are growing concerns about stagflation. Where the inflation rate is high at 17.9 percent, food inflation at 22.72 percent, the economic growth rate slows down and unemployment remains consistently high (33.3 percent), the second most high after Bosnia and Herzegovina and Namibia (33.4 percent).
He warned that the combination of rising unemployment and prices and weak growth, often described as “stagflation”, could trigger significant social unrest.
The International Monetary Fund (IMF) had previously predicted growth of 2.5% and an inflation rate of 16% by the end of 2021,
The employers’ body also said it expects the Monetary Policy Committee (MPC) to present tighter monetary options to curb the upward inflationary trend.
Adeniyi, who highlighted some policy recommendations and way forward to chart new economic directions for the country’s long-term growth, said more efforts were needed and greater political will was essential for the he economy continues to grow steadily.
He said the reduction in growing insecurity and regional unrest would point to a positive political direction over the next two quarters. He said that after the government’s tight fiscal space, investments in critical sectors would boost economic recovery and maintain growth momentum in the medium term.
He argued that attracting and retaining investment in critical sectors in Nigeria would require a stable environment, where policies are fairly predictable or at least political uncertainties are minimized.
For Nigeria to become strong and robust, the NECA President stressed the need to achieve high and steady economic growth.
He felt that Nigeria, which required more than just an economic resurgence, also needed to increase the inclusion of growth, arguing that for decades the country had struggled to create inclusive growth, l The economy has been on an unstable growth trajectory since recovering from the 2016 recession and the COVID-19 pandemic which plunged it back into a new recession in 2020.
He said: “With the devastating impact of the twin phenomena of poverty and unemployment, as the level of insecurity continued to accelerate, the conversation to achieve inclusive economic recovery has never been more important.
“The government and relevant stakeholders must work together to overcome constraints to the development of the value chain in sectors with high growth and high elasticity of employment such as manufacturing, construction, trade, health, professional services with information and communication technologies and renewable energy sectors as catalysts for growth. “
In their remarks, the International Labor Organization, director for Nigeria, Ghana, Sierra Leone and Liberia and liaison office for ECOWAS, Vanessa Phala, pledged the organization’s support to employers of a economic point of view to approach the interventions in a holistic way.
Nigeria Labor Congress (NLC) President Ayuba Wabba said Nigeria lacks the competitiveness to excel because it is not manufacturing at its optimum capacity to create more jobs.
Wabba, speaking on the African Continental Free Trade Agreement (AfCFTA), said the rule of origin must be respected so that Africa, and indeed Nigeria, is not turned into a dumping ground for because of the large population and the viable economy.
Regarding the challenges of multiple taxation, inconsistent policies, high inflation rate and devaluation of the naira, he said there was an urgent need to address the challenges and reverse the negative trend.
The union leader said the government needed to create an enabling environment for business development, adding that Nigeria was sitting on a time bomb given the large number of unemployed youth in the country.