Nigeria Employers’ Consultative Association (NECA) has called on the Federal Government to adopt additional measures that guarantee sustainable growth to avoid the economy relapsing into recession.
The employers’ body also strongly advocated the strict implementation of the Economic Recovery and Growth Plan (ERGP) in order to boost the confidence of both local and international investors in Nigerian economy and generate additional investments, which are critical to building a sustainable recovery.
These recommendations are coming at a time when only three sectors recorded growth in Q2. These sectors include Finance and Insurance, Agriculture, Crude Oil and Natural gas.
For instance, the manufacturing sector worsened from 1.36% in Q1 to 0.64% in Q2 despite improved forex supply to the market; construction sector growth declined marginally from 0.15% to 0.13% and hotels and restaurants declined further from a negative 3.96% in Q1 to -4.05% by Q2.
The real estate sector also saw a decline and sectors that swung into recession in Q2 include professionals, administrative and support services; education, health and arts, entertainment and recreation.
Speaking at a news press conference in Lagos on Thursday, Larry Ettah, president of NECA said that against the population growth rate of 3.2%, any GDP growth lower 2% makes no dent in Nigerian poverty, unemployment and inequality and is insufficient to ensure business growth and profitability.
“We urge economic planners to adopt measures to attain the ambitious growth targets stated in ERGP. Already we fear that the 2.19% growth target in ERGP for 2017 appears unattainable.
“We are of the opinion that government needs to adopt specific, targeted and effective policies to attract and promote private capital investments in the Nigerian economy, especially into infrastructure and industry,” Ettah said.
He expressed concerns over the continual rise in food prices with domestic food inflation reaching 20.3% in July 2017, adding that the trend is likely connected to conflicts between the herdsman and the farmers in vast areas of Nigeria’s North Central region, alongside forex conditions, making food exports attractive thereby exacerbating local scarcity.
He added that the recent floods in the region may affect harvest, further worsening the situation.
“We retain that domestic interest rates are too high for the productive sector, and monetary policy must abandon its tightening posture to both reduce rates and support better GDP growth,” Ettah said.
JOSHUA BASSEY & IFEOMA OKEKE
