BUSINESS ‘FG must redouble its effort on Northern economy’
hat is your take on the security situation of the banking industry, the workers and new investors, especially in the Northern part of the country?
Well, we can only appeal to government at all levels to further intensify efforts at ensuring the security of lives and property, not only in the banks, but for other industries, especially in the Northern part of the country. The security situation has become a major challenge for workers and investors as it is already taking its toll on the economy of the affected states, with implication for investments and jobs losses. We travelled recently to Taraba State and we discovered that the hospitality industries in the affected states have been paralysed and many investors, especially SMEs, are relocating to other states.
How do you think the federal government can transform and sustain the economy of Nigeria in view of the recent rebasing of the nation’s GDP?
There is an urgent need for the federal government to support the private sector growth, through ensuring a stable macroeconomic environment, low inflation, stable exchange rates, investing in critical infrastructure like roads, railways, power, and investing in the development of skills of our people. I am of the view that since we are now the largest economy on the continent and the 26th largest in the world, after our GDP rebasing exercise that made our GDP for 2013 to be at about 510 billion US Dollars, then, there is urgent need for the three tiers of government to focus on a number of priority sectors which have high job-creating potential, such as agriculture, manufacturing, housing and construction, and the services sectors. It is true that we need economic growth - but we must work to ensure that this growth is inclusive; we must begin to think about introducing social protection measures. It is obvious that Nigeria still faces difficult challenges, but it is also clear to us in the labour movement that Nigeria is also confronted by tremendous opportunities to harness her young population in a manner than can provide unique dividends to its people. There is, therefore, an urgent need for our leaders to think big and bold to realise the potential of
Comrade Olusoji Salako is the President of the Association of Senior Staff of Banks, Insurance and Financial Institutions (ASSBFI). In this interview, he speaks on issues affecting the nation’s economy.
the country’s human and natural resources to sustain her economic growth. I believe, and given the fact that democracy has come to stay in Nigeria, and with the political will and commitment of our leaders, they will take decisions and the right steps, to take Nigeria to greater heights.
What is the position of ASSBIFI on the debate on the autonomy of the Central Bank of Nigeria?
Well, ASSBIFI has watched with keen interest the debate on the autonomy of the Central Bank of Nigeria and the association has made it clear that in line with global best practice, it is good for the Central Bank of Nigeria to be autonomous, financially and operationally, in order to be able to discharge its functions effectively and promptly. We align ourselves with the school of thought that is in favour of the preservation of the autonomy of the CBN. We also recall that it was this autonomous status that enabled the CBN to respond quickly to the challenges of the past in the Nigerian banking system when the apex bank bailed out the industry from collapse. And it is on record that no bank failed in the process because of the speed and effectiveness of its intervention. However, we concede that the autonomy cannot be absolute and that, in any events, for the nation’s economy to be competitive, no institution should have absolute powers. Therefore, what is necessary is to strengthen the existing structures of controls within the framework of the CBN Act 2007. This is because, for instance, the CBN governor is an appointee of the president and, therefore, the president has some oversight responsibilities over the CBN governor. The board of directors also has powers of checks and balances even though the governor is the chairman of the board. And so, to make the board play this role effectively, the number of independent directors, who are also appointees of the president, could be increased, and they should be men and women of high intellectual and moral standing and truly independent. We are also of the view that the deputy governors of the CBN should remain on the board in order to provide the desired technical input into the board’s deliberations
There have been several calls to maximise exploitation of the nation’s non-oil sector. How do you think the federal government can spur the growth of the sector?
I believe when there is a will, there is a way. I am aware that for the past few years now, there are countries that are looking for traditional stories of economic activities. I know of cocoa, we have not heard of that for some time because we have oil money to spend. There is an urgent need for us as a nation to look back at when we started producing cassava and Nigeria overnight became the largest producer of cassava, but because it was an integrated production system, there was no market. The scheme for Partnership for African Development (PAD) and the NEEDS are sorts of value addition as one of the cross-cutting issues in the nation’s economic development efforts which the government has neglected in the past, that should be revived to sustain the non-oil sector.
How can federal government use both fiscal and monetary policies to propel economic change in Nigeria?
The fiscal policy is a set of tools for mobilising and allocating resources. The issue of revenue generation has to do with the government creating additional incentives for people to go into the real sector activities as a means of expanding the taxable base. We, therefore, call on the government to provide incentives for people to use our local resources, like tax holidays, as spelt out in the industrial policy of Nigeria. I think the most important thing that the fiscal policy has to do is getting value for money for public outlay. On the monetary side, the monetary authorities are doing fine because to my knowledge, this is the first time in the history of Nigeria where there are good set of macroeconomic policy and perspective to managing the monetary sector. I think we are in the right direction. The only aspect which I think should be taken care of now is the issue of interest rate, excess liquidity, I believe if these two issues are taken care of, people will be willing to invest in the real sector when the cost of borrowing is much lower. And this aspect can be achieved when the challenges of corruption in the country is minimised
Do you think investing in enterprises and decent work opportunities are possible in Nigeria in the nearest future?
Well, investment and employment in Nigeria are constrained by the high cost of, and difficulty of, accessing credit, problems in securing property rights and enforcing contracts, weak energy, transport and communications infrastructure, delay in the registration of businesses, a lack of transparency in the regulatory process and deficiencies in education and skills of the labour force in the country. Nigeria has made tremendous efforts to establish conditions for higher growth, in terms of a betterregulated financial environment, policy reforms to attract investment and development assistance, and improving the competitive environment to raise productivity and decent working conditions. Nevertheless, the bulk of Nigeria enterprises, many of which are operated by unskilled men and women, remain trapped in the informal economy, yielding owners and workers little more than survival-level incomes and inhibiting the exercise of their rights under labour laws. Nigeria needs a strategy for sustainable enterprise development and decent work and the strategy should include the creation of enabling environment, measures to improve the investment climate, macroeconomic stability, respect for workers rights, and good governance. We are of the view that particular attention should be given to policies that promote SMEs and women’s participation and entrepreneurship in employment generation.