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Economic agenda for the new government

The major issues are as follows: Macro economic issues
The GDP growth performance has been good over the last few years but impact on standard of living and private sector performance has not been impressive.  Growth has to reflect development, productivity and improved private sector performance.

President Jonathan needs to address the critical barriers to real development in the economy. We desire a growth that create jobs and improve private sector productivity and competitiveness.

Foreign Exchange
Naira Exchange rate has been depreciating in the last few months, resulting in escalation of production costs in the economy. We would like to see a reversal of this trend.    The exchange rate should be stable and sustainable.  Current parallel market premium is very high and has the potential to create other distortions in the economy.

Inflation Rate
Double digit inflation is not good for economic and private sector performance.  It aggravates costs and weakens consumer demand.  Inflation rate of over 12% as at March this year is not good for business as it erodes purchasing power and undermines profitability of businesses.  In the next 4 years we will like to see concrete steps being taken to curb inflation.

Fiscal Deficit
The soaring Fiscal Deficit of the past two years is a cause for concern.  Its impact on macro_economic stability and general economic performance is significant.  We will therefore like to see a programme for a progressive reduction in fiscal deficit over the next four years. The administration needs to improve on its record of fiscal discipline.

Domestic Debt
This is related to the Government needs to curb the escalating domestic debt profile which is currently estimated at N4.8 trillion.  The burden of servicing this debt is becoming an increasing concern.  We urge for an urgent moderation of the debt in the next four years.
Infrastructure Issues

There are serious concerns about the state of the following critical infrastructures:
“Power supply
“Roads
“The railways

We note and commend the power sector reform but we request that the process should be accelerated and translated to concrete results in terms of delivery of electricity.  The Government should commit a greater portion of its resources to the short_term power improvement programme.  This is without prejudice to the medium and long_term plans.  The current power sector situation has become unbearable.

Funding issues
Cost of credit in the Nigerian economy is still unbearably high, over 20% per annum in many cases.  This has serious adverse effects on business and needs to be addressed.  Access to credit is still a big challenge for many investors especially the small and medium enterprises.  The tenor of funds in the financial system is too short to accommodate long_term investment.  This has created a big financing gap for the real sector of the economy.

Institutional Issues
Quality of public institutions in the Nigerian economy leaves much to be desired.  The key concerns are in the respect of the following:
“The Nigeria Police Force
“The Nigeria Customs Service
“The Judiciary
“The Civil Service.

Transaction costs with these institutions are extremely high.  There are serious corruption problems with many of these institutions  there are also capacity problems with most of the public sector institutions.

Corruption
Corruption is still very much endemic in many public and private sector institutions.  It is however, more pronounced in the public sector.  This is true of many of the procurement and contract managements processes.  It has implications for quality of projects and the delivery of public goods to the citizens.

Policy Issues
Government policies should be credible, consistent and sustainable.  Policies should also be predictable and promote the principle of level playing field for all investors _ small, medium and large enterprises.  Policies should not perpetuate the rent economy.

The Ports
The huge potentials for wealth creation are revenue generation inherent in the ports related activities is yet to be fully harnessed.   The major beneficiary is our neighbouring country, Benin Republic which has taken advantage of the appalling inefficiencies and corruption that are prevalent in the Nigerian Ports.

Under normal circumstances Nigeria Ports should be the hub for the entire sub-region.  In the next four years we will like to see a dramatic improvement in the management of the Ports as well as the Customs administration.

Petroleum Industry Bill
The Petroleum industry bill which is the main vehicle for the reform of the oil sector should be passed urgently.  The huge potentials for the economy in this sector can only be realised with the passage of the bill.  The Presidency should bring its influence to bear on the legislature for this to happen.

Patronage of the made in Nigeria products
For too long government has paid lip service to the promotion of made in Nigeria goods.  We would like to see a more serious commitment to this ideal for the development of local industry.  The MDAs must be made to commit to this policy.

Multiple Taxes & Levies
This has continued to be a problem for many businesses across the state.  It is more pronounced at the state and local government levels.  We call for a review of the tax system to curb this practice.

Human Capital
The quality of human capital in the economy has been on the decline and affecting investment and productivity.  Public educational institutions are in a state of decay.  The cost of private education is very high and beyond the capacity of many parents. Health Institutions have also declined in quality forcing many citizens to resort to private hospitals.  An economy need quality human capital to make significant progress.

Security of lives and Property
Much has been done to ensure the protection of lives and property.  But much still needs to be done.  We would like to stress that this is a cardinal responsibility of government.  The funding of the security agencies should be improved and the quality of spending in the institutions should also be enhanced.

Quality of Cabinet
President Jonathan should populate the cabinet with people with track record of integrity, performance and robust intellectual content.  The practice of using ministerial appointments as rewards for political loyalty and electoral support should be discontinued.  At the end, the administration would be judged by its impact on the lives of the people.

Otunba Femi Deru is the current President, Lagos Chamber of Commerce and Industry


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