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The Organised Private Sector wants the Federal Government to create a consistent policy environment and provide gas for manufacturers and key players in the productive sector, so as to pull the economy out of recession.
“Gas prices in Nigeria are considered extremely high, especially when one dollar exchanges for N320,” said Africa’s richest man Aliko Dangote, who is the president of Dangote Group, at the Presidential Dialogue Session held on Thursday in Lagos.
“Policy consistency is also very important. If there are changes in policies or if there are policies coming, it will always be good to interact and communicate with the private sector. There is a need to dialogue with the private sector so as to know how painful it is when policies are changed mid-way,” Dangote said, while presiding over the dialogue session organised by the Lagos Chamber of Commerce and Industry (LCCI), and attended by Vice President Yemi Osinbajo.
The OPS believes the Federal Government should incorporate and appoint key business leaders into the its economic team and Presidential Council of Ease of Doing Business, suggesting that economic diversification must begin with easing the business environment and ensuring that oil &gas becomes a key driver of economic diversification.
“One of the problems of oil & gas is instability in polices. Emphasis also needs to be placed on the sanctity of contracts. Ease of doing business has been on the agenda of successive governments, but at the moment, the indices are not looking well, “ said Mutiu Sunmonu, chairman, Julius Berger Nigeria Plc and former country chief of Shell Development Petroluem Company.
Sunmonu said that while Nigeria is targeting economic diversification, the country should ensure that the oil and gas sector succeeds in the short term, as its revenue is needed for diversification projects.
Austin Avuru, managing director, Seplat, said daily consumption of natural gas has grown from 300mscf over the last few years to about 1.7Bcf today, adding that if Nigeria strives to push its gas consumption to 3bcf by 2020, the resource will become the engine of economic growth and development and in the process, deliver 15,000MW of electricity and all its multiplier effects. Two of its multiplier effects are the establishment of fertilizer plants which will ensure food sufficiency and export to neighbouring countries, as well as the establishment of petrochemical plants that will create quantum jobs for the unemployed.
Avuru said the way to achieve these objectives is to ensure a free market economy, invest in infrastructure and the issue of the great disparity between prices charged by gas producers ($2.50) and the end user price ($7.50) will disappear.
The Seplat chief executive said that in addition to aggressive gas development, Nigeria should strive to meet the target of refining locally 1.2 million barrels of crude oil per day.
“If we strengthen and grow our local refining capacity to at least 1.2million barrels per barrel a day, Nigeria will become the hub for petroleum products in West Africa and beyond. We can also invest another $300 million to put receiving terminals in different parts of West Africa, the entire region will stop importing petroleum products from Europe”, he said.
Nigeria is technically in recession and data from the International Monetary Fund show the economy has contracted to $296 billion, putting the country back to the 2014 position as Africa’s second largest economy after South Africa. Inflation has hit 16.5 percent, while household wallets are growing increasingly empty. The country’s woes were triggered by the crash in oil prices and revenue, as well as delays in making critical fiscal decisions.
“We need the right mix of policies to achieve the desired outcomes. At a time like this, we should do all that we can to attract private capital, both from the domestic and the global investing community,” said Nike Akande, president, Lagos Chamber of Commerce and Industry.
Frank Udemba Jacobs, president, Manufacturers Association of Nigeria (MAN), said the 41 items not valid for foreign exchange is affecting manufacturers as it makes it difficult for them to have inputs at their factories.
Responding, Yemi Osinbajo, vice president, said the Federal Government is looking at handling the issue of 41 items fiscally, rather than allowing it to lean on monetary space, stressing that the business community needs to respect integrity of contracts.
Osinbajo said the Federal Government has settled numerous problems facing Ajaokuta Steel Complex, stating the plant will be up for sale soon, while the Itakpe Iron Ore will remain in the hands of a preferred bigger for seven years.
He said the government has raised rice production in Kebbi State and that the Presidential Council on Ease of Doing Business will soon unveil critical steps on how to make Nigeria a convivial investment destination.
Udo Udoma, minister of budget and planning, said the Federal Government wants to move Nigeria at least 20 places up in the Ease of Doing Business ladder, stressing that the government has chosen to dialogue with the private sector to transform the business environment, produce what citizens eat and export.
FRANK UZUEGBUNAM & ODINAKA ANUDU
