Expert Urges Business Operators to Be Innovative
The Director General of the West African Institute for Financial and Economic Management (WAIFEM), Prof. Akpan Ekpo has advised operators of businesses in the country to seize the opportunity of the economic recession in Nigeria to be innovative.
He also urged them to explore and exploit government policies regarding agriculture and invest in made-in-Nigeria goods and services.
Ekpo, who said this in a keynote address he delivered at a roundtable conference organised by the Chartered Institute of Bankers in Nigeria (CIBN) on the 2017 Economic Outlook in Lagos recently, pointed out that if the objectives of the 2017 appropriation bill are met, the year would provide opportunities for businesses particularly large and medium-scale firms.
These objectives, according to him, would also allow for new domestic and foreign investors.
The federal government’s economic recovery and growth plan stresses five areas of immense importance to the private sector (businesses): macroeconomic stability, competitiveness, growth and diversification, social inclusion, governance and enablers. According to the federal government, the 2017 proposed budget estimates were designed to partner with the private sector to ensure the growth of the economy. The objectives of the budget indicate areas which should interest businesses in Nigeria: emphasis on critical on-going infrastructural projects such as roads, railways, power, ICT; using special economic zones and industrial parks as vehicles to fast track domestic economic activity for innovation and wealth creation; contributing to food security and creating a platform for agro-business; stablishing a Social Housing Fund, among others.
Therefore, the WAIFEM boss held the view that businesses in 2017 would be encouraged to remain afloat under the following conditions: better macroeconomic management, competitiveness, security, good governance, policy implementation, and infrastructural development
He explained: “Businesses must design strategies to survive the recession. It is on record that small scale and medium-size businesses which depend on foreign exchange have closed shops; others have reduced costs particularly laying off workers, so as to survive the recession.
“Businesses need to explore and exploit the opportunities created by the government as a result of the recession. The government’s policy on diversification portends advantages in the areas of agriculture and agro-industries.
“The policy of buy made in Nigeria goods and services is another action in the right direction. The Nigerian economy is a large market and can absorb domestic production of goods and services. Business should show interest in sectors with more local content to avoid the foreign exchange constraint.”
He held the view that the Nigerian economy would recover from the recession by the third quarter of 2017 if 80-85 per cent of the projects in the budget are implemented.
Furthermore, he predicted that there would be a positive but marginal growth in the Gross Domestic Product (GDP) thus ending the recession technically. However, he stressed that the structural problems of the economy would remain.
“In addition, the rising rate of unemployment would remain a challenge. Therefore, it is important that government takes seriously the diversification of the economy particularly the process (es) of industrialisation. Businesses would expect a friendly environment conditioned by better macroeconomic management reflecting moderate rate of inflation, low lending rates, better infrastructure especially power, good governance, security, among others.
“The challenge would remain access to foreign exchange particularly those firms that depend on foreign exchange to purchase raw materials and equipment. Economic recession is a permanent feature in market driven economies like Nigeria. What is required is robust macroeconomic management to predict recessions and minimise its adverse effects on businesses and other economic agents,” Ekpo stressed.