The Centre for the Promotion of Private Enterprise suggests how the nation could rejig its policies in oil output, electricity reform, textile reform, fiscal incentives, decentralisation of the electricity grid, among others.
The Centre for the Promotion of Private Enterprise, CPPE, has highlighted policy options on how Nigeria can grow its economy.
A statement by Muda Yusuf, founder and Chief Executive Officer of the organisation, suggested how the nation could rejig its policies in oil output, electricity reform, textile reform, fiscal incentives, decentralisation of the electricity grid, among others.
The National Bureau of Statistics on Friday said Nigeria's Gross Domestic Product grew by 3.54 per cent in the second quarter of 2022 on a year-on-year basis.
Details of the Nigerian Gross Domestic Product Report Q2, 2022 showed that in nominal terms, aggregate GDP stood at N45 trillion in the second quarter of 2022.
The NBS said the performance is higher when compared to the second quarter of 2021 which recorded N39.12 trillion, indicating a year-on-year nominal growth rate of 15.03 per cent.
Mr Yusuf in his statement said that the GDP growth in the second quarter of 2022 marked the seventh consecutive quarterly GDP growth since the exit from recession in the fourth quarter of 2020.
"This report reflects the resilience of the Nigerian economy amid extreme macroeconomic challenges, galloping inflation, currency depreciation, foreign exchange illiquidity, high energy cost, heightened insecurity, weakening purchasing power, structural bottlenecks and trade facilitation issues," the statement said.
Policies
As part of the policies put forward by the centre, Mr Yusuf said the nation needs to address the challenges of the massive oil theft which is affecting the oil output. The safety of the oil facilities is also very paramount to reverse the under performance of the oil and gas sector, the statement said, adding that the implementation of the Petroleum industry Act would equally boost investment in the sector.
The electricity sector reforms need a review to improve efficiency and productivity in the sector, the statement added.
"The challenges in the electricity supply chain needs to be urgently addressed - gas to power, transmission, distribution, energy pricing, metering, and the capacity of the distribution companies.
"All of these are needed to improve performance and attract more investment into the sector."
The CPPE noted that there is a need to put fiscal incentives in place to boost investment in renewable energy in line with the energy mix objective of the government. Such incentives could be in the areas of tax incentives and the waivers of import duty on renewable energy equipment, it added.
On electricity challenge, the centre noted that there is an urgent need to decentralize the national grid for ease of management and efficiency, in addition to a deliberate policy to attract private investment in the electricity grid.
The textile sector is a victim of the current harsh business climate, especially for the real sector, it noted.
"The key element is the high energy cost, forex illiquidity, currency depreciation and weak domestic patronage. The government should ensure that all uniforms of security agencies and other government institutions are produced from local textile fabrics. Generic issues of high energy cost also need to be addressed.
"The rail system needs adequate security to rebound. Government needs to accelerate the security cover for the rail lines and the and the railway transportation system across the country.
"There should be an urgent engagement with investors in the auto assembly plants to identify the peculiar challenges facing them. But surely, better patronage of vehicles assembled in Nigeria would have a positive impact on the performance of these firms."
The centre argued that the maritime sector of the economy is a very important sector in the international trade process, playing a very critical role in our import and export trade.
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However, it said, there is evidently a gross under-reporting of the activities of the maritime sector by the National Bureau of Statistics.
"For instance, in the Q2 GDP report, the maritime sector [water transport] was said to have contributed a mere 2.4 billion Naira to the GDP out of N45.5 trillion GDP for the quarter. This is a contribution of a mere 0.01%.
"In the first quarter of 2022, the NBS recorded 0% contribution of the sector to GDP. In the GDP numbers, water transport is the only proxy closest to maritime. But maritime sector activities are beyond water transportation.
"We therefore appeal to the National Bureau of Statistics to engage with stakeholders in the maritime sector to ensure a proper capturing of the activities of the sector and the contributions of the sector to the national economy."
The GDP figures over the years have been grossly under reporting the contribution of maritime to the national economy, it said.
