In order to revive the faltering economy, the Center for the Promotion of Private Enterprise (CPPE) has urged the incoming administration to form a transition committee on the economy.
The advocacy organization additionally called on the administration to create a strong framework for economic governance that is “compatible with tried-and-true economic principles and empirical data” as soon as possible. It suggested that this should be based on the nation’s unique socioeconomic characteristics.
“This is critical from the onset of the administration for signaling and investors’ confidence. A good economic governance framework would entail the following: setting up a transition committee on the economy to come up with propositions of what needs to be done differently and ensure the delivery of quick wins in the first month of the administration,” an agenda for the upcoming administration was listed in a paper that its director, Dr. Muda Yusuf, signed.
A technically sound economic team is required within the context of economic governance to provide direction and guidance on general economic policy direction, policy conceptualization, and urgent changes to save the economy, the report advises.
The CPPE envisions an economy with a level playing field for all participants, a transparent process for formulating economic policy, a competitive environment with a low prevalence of monopolies, and an expansion of the role of markets in delivering value while fostering private entrepreneurship.
“State institutions do not have the capacity to manage enterprises,” while admitting the importance of a strong monitoring and evaluation system for routinely assessing the efficacy and impact of economic policies and regulatory practices, it claimed that this framework is not yet in place. It emphasized that the relevant regulatory institutions that are essential to establishing a robust economy should be led by tested technocrats.
The Asiwaju Bola Ahmed Tinubu administration will take over an exceedingly unstable economy that is hampered by huge debt, unaffordable debt payment costs, a weak naira, limited purchasing power, an extraordinarily high unemployment rate, among other factors.
The Federal Government’s obligations alone are approaching N100 trillion, according to The Guardian, meaning that the future administration would have a Monumental challenge getting the economy moving again.
CPPE’s advisory has tasked the administration to “prioritise macroeconomic stability with emphasis on moderating inflationary pressures, stabilising the exchange rate and boosting economic growth” as it keeps eyes on the ball of making Nigeria great.”
“Reform tax regime to ensure efficiency in tax administration, reduce tax evasion and tax avoidance and eliminate multiple taxations; eliminate fuel subsidy to save an estimated N7 trillion annually; eliminate foreign exchange subsidy to unlock a minimum of N3 trillion revenue annually from the sale of the Central Bank of Nigeria (CBN) forex to the official foreign exchange window and unlock more income from revenue generating agencies through enhanced efficiency of their operations,” it stated.
It also urged the quick implementation of budget reforms to ensure financial responsibility, reduce budget padding, end project duplication, and enhance transparency by reviewing service-wide votes.
The economic think tank is investigating a comprehensive reform of the foreign exchange market that would lessen the significant arbitrage in the market, increase the openness of the allocation process, and ultimately enable capital inflows into the economy.
The CBN is at the center of reform suggestions made in recent years by regional and international organizations. The World Bank and the International Monetary Fund (IMF) cautioned that a reform that would usher in the market reflective exchange rate would be necessary to achieve market stability as FX market arbitrage reached 100% last year.
In response to Tinubu’s victory in the most recent presidential election, an applied economics professor named Godwin Owoh claimed that a reform that fixes the CBN’s management issues would solve the nation’s macroeconomic problems by more than 50%.
Owoh claimed that it is Tinubu’s responsibility to employ “technically capable individuals” to deal with Nigeria’s problems. He believed that a great Nigeria was possible if the incoming administration explored all of the available choices objectively.
Many people view the handling of premium motor spirit (PMS) subsidy reduction as the first true test of the incoming president’s ability and readiness to provide the required high-caliber leadership.
CPPE would require the administration to “demonstrate unmistakable commitment to the implementation of the Petroleum Industry Act” to attract more investment into the oil and gas sector and remove petrol subsidy “with minimum shocks to the economy and the citizens”.
“A substantive minister of Petroleum Resources should be appointed to promote professionalism and transparency in the sector.”
The practice of the President assuming the role of Minister of Petroleum should be discontinued,” it added.
