Now that Nigeria has ratified the African Continental Free Trade Agreement (AfCFTA), the Nigeria Employers’ Consultative Association (NECA) has urged the federal government to re-assess its economic strategies and tailor its policies and reforms toward radical industrialisation of the country.
It said there was an urgent need for radical economic reform in the economy, now that Nigeria has indicated its readiness to participate in the continental trade agreement, adding that it was only through well-though out policies that the country could compete effectively in the emerging new economic order.
Speaking in Lagos recently, the Director General of NECA, Mr. Timothy Olawale said, “there is no better time for the government, to focus on a radical industrialisation of our country as a means of making it the hub of economic activities in the West African sub-region and also ensure Nigeria benefits maximally from the AfCFTA.
“We have consistently taken the lazy path of tax increases that stifle and further burden businesses rather than the ingenious way of promoting and stimulating production, ” he said.
The NECA boss also said, “government should take a bold attempt to industrialise the country and take it out of the woods by embracing a major policy shift from focus on taxation to production.
“What our economy requires, now, are radical far reaching policies like the abolition of VAT on real estate sales, financial services and domestic airline ticket sales, capital gain tax on sales of shares and import duty on spare parts.”
He argued that VAT on small traders should be reduced to three per cent, while also calling for the abolition of import duty on machinery and raw materials amongst many others.
If all these are implanted, the NECA boss said it would directly stimulate production and create wealth for the nation and its citizenry.
Olawale stated that, “production and productivity induced policies focused on the rapid development of our industrial base is the only sustainable option for our national development.
“We commend government for the efforts made in the last four years to stimulate the economy and support the real sector.
“However, the contradictions in the regulatory environment has consistently negated these efforts.
“If government can muster the political will to take expected radical bold steps, Nigeria in no time might become the industrial hub of the African continent,” he said.
The Financial Derivatives Company Limited recently listed some of the benefits Nigeria stands to enjoy by joining the trade area to include, but are not limited to wider market; localisation and economies of scale; job creation, as a larger market would require increased production to meet growing demand.
On the other hand, it pointed out that the main threat to Nigeria signing the agreement was loss of government revenue through the reduction and eventual elimination of tariffs.
“Another risk is that the country may be turned into a dumping ground for sub-standard goods and increased competition, which would negatively affect the domestic industry,” it stated.
The goal of AfCFTA is to create a single integrated market, which would increase trade across the continent and lead to free movement of goods and services. “With a population size of 1.2 billion and a combined GDP of $2.6trillion, the trade agreement will cover the largest market in the world.
“Africa is a continent rich with diverse raw materials ranging from minerals to agriculture.
“The trade agreement would help change the continent’s narrative from being just a source of raw materials to a destination point for high quality finished goods and services,” the report added.