As Nigeria braces up for the new administration that will take over on May 29, LCCI has given their own view of the current situation of things. In this interview with Julius John, the Director of Research and Advocacy of the Chamber of Commerce in Lagos Vincent Nwani, reels out what the commerce and Industry body expects from the new government.
How do you rate the Nigerian economy today?
If I am to be very candid with you, the signals we are getting are not very palatable. On daily basis we insightfully look at the market and the feedback we are getting shows that something is happening. Demand is weaker. This is the second quarter of the year when the uptick is traditionally stronger compared to first quarter when is not always good and lively. This corresponds with what you see on the pages of our newspapers saying that times are hard.
What sector is feeling this most from your research?
Manufacturing and trade seem to be the worst hit by this terrible economic time the country is facing today. To a large extent, manufacturing fits into trade. You see manufacturers talking about the fact that their distributors, the big and small ones, are not placing inventory demands as they used to.
Also the trade credit is also expanding where the traders are no more returning the money and coming to take goods again. As such, we see a lot of non-performing trade credits. Beyond that however, we are concerned at the Lagos Chamber of Commerce and Industry about the revenue issues and the tough times we are going to face from May 29.
What are your concerns specifically?
We have tried to articulate that in our agenda-setting document which we have sent to transition committee and the All Progressive Congress strategic team. In that document, we admonish the incoming administration to be careful first and foremost in choosing the team. You can have the best agenda or the best idea in the world but making it move from the realm of being an idea or an agenda to results is always difficult when you do not have the right people to translate it into actions. We also want to see the key advisers and ministers immediately instead of keeping the list to his chest for so long like he has done.
Beyond this, the private sector also wants to see the real agenda of this administration. Even though we have seen their manifesto, we want this manifesto cascaded into visions. We want to look at it to see those things that will happen immediately, in the midterm and in the short term. This will help both domestic and foreign investors to resist shock and uncertainty.
You have talked about the issue of your agenda setting for the new government which you have communicated to them. However, let us break it down further for Nigerians. What are areas you feel are priorities and how should they go about that?
The major priorities are funding and micro-economic stability. These are very important. Funding is now a key issue and it is a short term issue because we need to know that the war in the North-East is contained.
You are saying funding, when you know that our reserves are depleting. You say funding is a key issue. Are you talking about alternative sources of funding?
Yes we are looking at alternative sources of funding but again that will not happen on June 1 20015. The first thing the new government has to do is blocking the leakages and wastages in the system and there are a whole lot of them. The arbitrary manner and impunity with which wavers are granted which led to the loss of 600billion in 2014 alone virtually on granting of waivers and tax incentives, the oil theft in the Niger Delta and a couple of other issues are loopholes which need to be blocked immediately.
Another issue is the size and cost of government. Of course we know that the constitution stipulates how many ministers we must have and that each minister must come from each state but we at LCCI still believe that the executive can do something that will make a bold statement as far as cutting down the cost of government in Nigeria is concerned. We need to make the size of government small and cost centric. This should not just be done in Abuja but also in all of the states. Transparency and accountability on the part of government can send the right signals to Nigerians. The Integrated Payroll Information System needs to be implemented. We have seen that most of the ministries, agencies or parastatals are costly on the overhand of wages.
You started off by saying the caliber of persons is very key here if not some of these fantastic points will amount to nothing. It goes back to the kind of persons we want to see. I am worried because you say we want to see them come with a cabinet on thatMay 29. You need to see people that will run along with some of these ideas and visions. How possible can that be for a government that is not in office yet?
You and I know that the incoming government campaigned on change and if there is anything people look forward to, it is change. I remember when Obama won the elections to become the President of America, before his swearing in, he had started naming key people who will occupy key roles in his government. Even though such a thing has not happened in Nigeria but if we really buy into change, we want to see a situation whereby latest on the 10th of June, we already know the personalities who will occupy key positions in the new government. It is very important because we know that the challenge we are facing is not result challenge but rather, management challenge. Bringing a capable team that will manage this economy is very vital. It will begin to give us confidence that the body language of this administration is consistent with the mandate or the manifesto which they sold to us which majority of Nigerians bought. Of course, the expectations of Nigerians, whether in the public or private sectors, are very high right now. We are no longer patient. The social media is not ready to pardon anybody at this time.
Can you tell us some more things Nigerians want to see in the first one hundred days of office of this new administration?
Just for example, I am not the president but the thinking of the Lagos Chamber of Commerce and Industries is that from the first day, this new administration needs to send strong signals and strong message, no matter how hard it is. They need to do this especially now that the popularity and acceptance of the incoming government is very high. They can get away with a lot of hard things right now. For example, the Petroleum Product subsidy, whether it is in Kerosene o fuel. This needs to be yanked off almost immediately. Of course, if that is done, we might pay more for the product but the issue of scarcity will be off. Those who presently enjoy subsidy are just 10% of Nigerians. This is why something needs to be done. Once the fuel subsidy is removed, it will free up a lot of resources.
Electricity supply has dropped to an all time low. How are members of the chamber copping, especially when we have been told that we have lost close to 1800Megawattz in terms of supply? How has the manufacturing sector been copping with that?
Are we copping? I must confess that it is very tough and difficult. As a matter of fact, it is killing manufacturing and it is making our cost to be unreasonable. It is also making us more inefficient because apart from spending more on alternative power such as diesel and generators, most of these manufacturers, instead of focusing on the core mandate of producing the quality control issues, fifty percent of their attention is now focused on the power unit. Our survey has revealed that for large scale manufacturing outfits, 30% of their cost of production is spent on power.
One of the things I find interesting is that your submissions are not on what the government should do about power but rather, on other areas of the economy. How do you think this will translate to gains for the private sector which is where LCCI comes in?
Anything good done by the incoming administration translates positively to the private sector. Meanwhile, we are waiting for the power issue to be addressed. If you deal with the fuel subsidy issue, it has a way of helping the power sector. At least we save the time we spend queuing at the filling station.