Adeniyi: Govt Budgets Must Prioritise Job Creation

The President of Nigerian Employers’ Consultative Association (NECA) Mr. Taiwo Adeniyi, speaks about the associations oncoming employers’ summit and the implications of the current high cost of energy, especially diesel, on the economy. Dike Onwuamaeze brings the excerpts:

May you explain objectives of the oncoming Nigeria Employers’ Summit, which is being promoted by NECA? I want to thank you for the interest you have in our activities. This particular summit is special. We go to meetings to report that the unemployment figures are going up without any concerted effort, and I am choosing my words now, to bring down the figures. For us as members of the Organised Private Sector of Nigeria (OPSN), and NECA in particular, we have decided to do it differently by organising an employers’ summit. The summit is aimed at providing the OPSN and other stakeholders the privilege to identify and explore the nexus between a thriving private sector and national economy. The second aim is to provide a platform that will help to identify the impediments to enterprise competitiveness and employment creation in the country and proffer solutions to these impediments. We are aware that graduates are being shunned out every year in tens of thousands from the universities and higher institutions of learning. But I always ask myself, where is the job market that will absorb them? We have statistics that showed that we have the highest number of unemployed youths. NECA is coming as a go- in-between to bridge that gap by providing that platform. We also want to put together a workable action plans and mechanisms that will include specified targets that will enable us to measure milestones and identify what we have been able to achieve within a given period. It may appear small but it is better to be gaining tractions than just talking without making movements. We are also hoping that the outcomes, recommendations and the communiqué that will come from this employers’ summit will serve as a strategic advocacy roadmap for the operators of the Nigerian economy. It will serve as the employers’ input to national planning, to national budgeting, and other developmental plans of the country. We want to bring people together and be able to measure the outcome of that gathering over time.

What is the extent of government’s involvement in this summit to ensure that its outcome will be implemented?Doing anything of this nature without government’s input will mean that failure is already embedded in it. What we have done is to reach out to the presidency and invite key stake holders that run this economy. We are expecting the special guest of honour to be the President and Commander-in-Chief of the Armed Forces, President Muhammadu Buhari. We have invited the Vice President, Professor Yemi Osinbajo, to be the guest of honour. We have invited the President of AfDB to be the keynote speaker. We have also invited the Speaker of the House of Representatives, Hon. Femi Gbajiabila, and the Honourable Minister of Finance, Budget and National Planning as well as the Honourable Minister of Industry, Trade and Investments, etc., will all be participating. Basically we want to bridge that gap so that we will have a rallying point for the government and the OPSN.  

What level of participation are we expecting from other segments of the OPSN in this summit? Currently, the secretariat of the OPSN is resident in NECA. We have a technical committees working on this project that involves the representatives of other arms of the OPSN. It is not NECA going it alone. We have the buy in of the MAN, NACCIMA, NASMEs and NASSI. NECA is the one spearheading this particular summit because its focus is on employment, which is one of NECA’s cardinal points. If the summit is about manufacturing, then the MAN will be driving it. 

How do we help the industries to create these jobs? The government of today has been doing a lot to create avenues for employment. It has come with all manner of grants, loans and funding windows. But what you found is that even to though these funds are available; most of our graduates do not know how to access them and therefore not being able to set up their own businesses. What we want, for example, is that in drafting the national budget we must ensure that we take into account the need to create jobs, which is beyond giving money to firms even though that it is good to support industries. We have to start being strategic about deploying these funds. And that is what this summit is trying to achieve. Everybody is saying that the economy is improving but we want to know how many jobs that have been added.  

How do you perceive the economic environment this year?The economy of Nigeria this year is divided into two halves. In the first half of this year, we are going to drive the economy and almost drive it crazy in the sense that there will be so many unusual things happening and we are beginning to see them. Diesel at the beginning of this year iwa around N280 per litre, it is almost N750 per litre now. And a lot of this will happen within the first six months of this year. But I can assure you that the second half of this year will be likened to a stiff abandoned engine that has been lubricated. So, I can assure that by the second half of this year, by the time the primaries of the political parties will commence, a lot of money will get into this economy and will force a change because people will have more access to financing to do things they had not been able to do earlier. So, I know there will be a change in the second half of this year. And it will drive us till a new administration comes in in 2023. 

What is the relationship between NECA and the Industrial Training Fund (ITF) in terms of capacity building? Well, I must give kudos to the ITF. What it is doing is to provide backing for skill acquisition and development in Nigeria. It is doing this across the industrial sectors by training manpower in all spheres of endavour. We are getting results.

What impact are FIIRO and RMRCN making on the industrial sector? I remember that I sat at a committee with the RMRCN over a company that wanted to produce calcium carbonate because I worked for a company that is an end user of calcium carbonate.  When I got the papers and went through them, I told them that this is a fraud. The RMRCN claimed to have inspected the factory but I insisted that it was a fraud. We interviewed the gentleman representing the company. After the interview it was obvious that all that the gentleman wanted to do was to get RMRCN to fund a project that is never going to be actualised. This is what you find in a number of these government agencies. These agencies sit in their offices and expect that things will just happen. They all have budget heads but who checks what they do with them other than recurrent spending? Each time I think of these things I pray that one day the government will hear me, and I am not sure that I am the only person talking about this. Why should customs have a target? What will the target achieve? Remove customs from revenue target and ask it to make ensure that all cargoes that arrive in this country must be cleared within 48 hours. Its ability to do this will help the industries. Somebody should do the critical analysis on the benefits to the economy of having customs as a revenue collection agency.

Is this what you meant by asking government to set its priorities right by avoiding policies that are counterproductive? This is one of them. Our economy is at a critical stage where we cannot continue to be repeating the same mistake that is not giving us the desired result. We need to review this and operate differently for three months to see what the result will be. Is not as quickly as I get my raw materials that I will quickly turn it around?  

Is Nigeria getting its economic priorities right as a country? We cannot say that totally we are not doing well in some areas. I will tell you a small story. In 2010 an organisation that I had worked for wanted to establish a factory in Sierra Leone. It approached the Bank of Industry (BoI) for N750 million. The BoI requested a bank guarantee from the organisation. That organisation went to one of its banks and requested for a bank guarantee. That request was turned down. The organisation went away disappointed because the money did not come out. In 2016, the same organisation went to BoI and this time around the executives of the BoI have been changed immediately President Muhammadu Buhari’s administration came in 2015. The same organisation went back to ask for loan from BoI. The personnel’s of BoI guided the organisation in putting its documents together that by the time it got to the bank it will not be rejected. The BoI became intentional and were ready to give out the money. The organiation ended up getting N4 billion against the initial request of N750 million. I know a number of other organisations that have also benefitted from that because the government was deliberate about it by changing the governance structure in BoI and measuring the bank based on the number of loans it granted to support industries. Who is measuring customs based on the number of cargoes that were cleared?  

How prepared is Nigeria for the AfCFTA? My fear about AfCFTA is that we are going to open up this economy, there is no doubt about it, but the question begging for an answer is will Nigeria benefit from it because our borders are so porous. What I suspect that is going to happen is that people will bring in goods from Europe and elsewhere into our neighbouring countries, repackage them and bring them into Nigeria in the name of AfCFTA. That is why we are talking about the Rules of Origin (RoO). If you ask the law enforcement agencies in Nigeria to enforce the RoO they will do it excellently well. But go across the border and ask them to implement the RoO and the story will be different. Mitigating this means that our government will be deliberate about it by Identifying key items of importation and set up industrial centres where they will be produced in millions, even funding the production of those items. We are not approaching the AfCFTA at the same speed other member countries are advancing toward it. They are moving very fast because they know that there is a market in Nigeria. We pray that our country will not become a destination trade centre where only trading will be happening and not manufacturing.