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Business News of Tuesday, 7 March 2023


Group set economic agenda for Tinubu

President-elect, Bola Ahmed Asiwaju Tinubu President-elect, Bola Ahmed Asiwaju Tinubu

The Center for Promotion of Private Enterprise, (CPPE), a body of economic think-tanks and policy analysts, yesterday set an economic agenda for the President-Elect, Asiwaju Bola Ahmed Tinubu, urging him to establish quality economic governance consistent with tested economic principles and empirical evidence and contextualised within socio-economic peculiarities.

The CPPE’s Managing Director, Dr. Muda Yusuf, in a statement, noted that the country’s economy is in a stumbling and fragile state and in dire need of a new direction. This is why Yusuf said the incoming Tinubu administration from the onset need to put policies that would signal and restore investors’ confidence in the economy in place.

Yusuf, a former Director-General, Lagos Chamber of Commerce and Industry (LCCI), said economic governance framework expected of the incoming administration should entail setting up a transition committee on the economy to come with propositions of what needs to be done differently and ensure the delivery of quick wins in the first one month of the administration. According to him, a technically sound economic team to give guidance and direction on general economic policy direction, policy conceptualisation and urgent reforms, will set the right tune for development.

Besides, Yusuf, through the CPPE, further urged the incoming administration to priorities macroeconomic stability with emphasis on moderating inflationary pressures, stabilising the exchange rate and boosting economic growth.

On fiscal consolidation, CPPE urged the incoming administration on the urgent need for a tax reform to ensure efficiency in tax administration, reduce tax evasion and tax avoidance and eliminate multiple taxation. Importantly, it noted that there is a need to remove fuel subsidy which it noted, will save the country an estimated N7 trillion annually.

The CPPE admonished that foreign exchange (forex) policy reform should be pursued vigorously. It noted that government should consider the elimination of forex subsidy from the sale of CBN forex to the official foreign exchange window. This, he said, will save the government over N3 trillion annually.

“This will unlock inflows of capital into the economy, reduce arbitrage in the forex market and improve transparency in the forex allocation. Also, it will ensure a market reflective exchange rate to eliminate the distortions in the forex ecosystem,” Yusuf said, adding that the removal of impediments to markets mechanism in allocation of forex will boost inflows from Foreign Direct Investment [FDI], Foreign Portfolio Investment [FPI], Export Proceeds and Diaspora remittances.

Importantly, Yusuf said there is a need for financial institutions reforms so as to properly position banks to play their fundamental role of financial intermediation for the benefit of investments in the economy.

“Some key regulatory instruments of the CBN should be interrogated to ensure their appropriateness and impact on the economy. The CRR regime is one of such policy instruments that would require a review. Current CRR of 32.5 percent is one of the highest globally. It has serious implication for financial intermediation,” Yusuf submitted.