Business
THE Centre for the Promotion of Private Enterprise, CPPE, has commended the recent Executive Order removing import duties, VAT, Excise duty on pharmaceutical raw materials, intermediate products, medical diagnostic equipment and machineries.
These fiscal policy measures would boost domestic production of pharmaceutical products, reduce the cost of medications, improve access to healthcare and impact positively on the well-being of citizens. It would also revitalize our pharmaceutical industries and create more jobs.
Fiscal policy measures have much better prospects of addressing supply side challenges in the economy, if well targeted.
Boosting production is very vital to fixing the current inflationary pressures, driven largely by supply side challenges in the economy. Fiscal policy measures are potent tools for the realization of this objective.
“We recommend that these fiscal policy measures should be replicated to boost production in other segments of the real sector. We need similar executive orders for agriculture, agrochemicals and Agro-allied industries to curb the surging food inflation; we need similar intervention in the energy sector, to promote energy security and incentivize private investments in the sector; there is need for similar support for Iron and steel sector to aid the construction industry and reduce construction costs for housing and infrastructure.
“We also need fiscal policy protection to support domestic investments in petroleum refineries to conserve foreign exchange, create jobs, and deepen backward integration,” the CPPE said in a statement on Sunday.
It added that there is a groundswell of economic nationalism globally and we should respond by strengthening our domestic production capabilities across all sectors. Fiscal policy measures have proven to be more impactful on real sector performance than monetary policy.
“The real sector of the economy deserves to be effectively protected and incentivized to improve production and ensure sustainability investments in that space. The Nigerian economy cannot afford to submit to a regime of complete trade liberalization in the light of the challenges faced by domestic manufacturers.
“We need to stem the tide of deindustrialization of the Nigerian economy, the exit of foreign direct investors and the rising mortality rate of domestic industries. We believe that stepping up fiscal policy interventions would facilitate the realization of this objective. But we must be ready to trade off some revenue in the short term. The economy would be better off in the medium to long term, with regard to growth in domestic production, less import dependence, heightened prospects of disinflation, higher job creation and better economic resilience,” It said.
Meanwhile, the CPPE commends the CBN for scrapping of its Price Verification System Portal which was a needless duplication of the functions of the Nigeria Customs Service, and a product of a dysfunctional foreign exchange regime. We urge the CBN to sustain its engagement with the private sector for quality, evidence-based feedback on monetary policy outcomes.
“In the meantime, we should identify other overlapping regulatory functions which had continued to constitute impediments to domestic and foreign investments. The impact varies across sectors.
Some of these regulatory overlaps exist with respect to the following institutions: Federal Ministry of Environment, National Environmental Standards and Regulations enforcement Agency, NESREA, State environmental protection agencies, local government environmental units, and state waste management agencies. There are also the overlapping functions in respect of SON, NAFDAC, Nigeria Agricultural Quarantine Service, Weights and Measures Department, Federal Competition and Consumer Protection Commission, FCCPC. These are some of the numerous regulatory institutions with overlapping mandates. They are sources of avoidable distractions and significant financial burden to investors.
“In the logistics sector there are numerous regulatory and institutional irritations from multitude of agencies of state and non-state actors creating logistics nightmare for investors. We have to state that VIO, FRSC, State traffic agencies, Police traffic units, local government traffic units, there are state and local revenue generating agencies on highways as well as non-state actors,” it said.
Meanwhile, in the spirit of the economic transformation programmes of the current administration, it is imperative to ensure effective implementation of Executive order 003, which prescribes that preferences must be given to local manufacturers of goods and service providers in the public procurement of goods and services by the MDAs.
There is also Executive order 005 which focuses on improvement in local content in public procurement with science, engineering and technology components. But a policy can only be as good as its implementation.These executive orders have been flagrantly violated overtime without consequences.
The CPPE appeals to the presidency to ensure compliance by the MDAs with these executive orders in the spirit of current efforts to boost domestic production, grow domestic talents and reform the economy,” the statement signed by Muda Yusuf, Director/CEO, CPPE, added.
F.A
July 1, 2024
Tags: CPPE Unlocking of fiscal policy
