The NACCIMA also criticised the Nigerian government’s fertiliser policy.
The Organised Private Sector (OPS) has decried the retention of the banking Monetary Policy Ratio (MPR) at 12 per cent by the Central Bank of Nigeria (CBN) for over a year.
According to the Nigeria Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), the foremost group for the nation’s OPS, the prolonged retention of MPR for more than a year, ”keeps interest rate high and unaffordable to borrowers.”
The national president of NACCIMA, Mohammed Abubakar, made this known on behalf of the private sector at a media parley in Lagos on Monday.
Speaking on the state of the nation, NACCIMA commended the Central Bank and its Monetary Policy Committee (MPC) for maintaining stability with the exchange rate and monetary policy; but it expressed concern with the continued MPR at 12 per cent for over a year.
”We counsel that business operators should not be allowed to continue to struggle with that kind of lending rate in existence if they are to thrive and boost productive capacities and create more jobs in the country” NACCIMA warned.
Noting that the world is now a global village, NACCIMA president claimed that ”competition is international and companies in Europe and United States are borrowing at 2 per cent and less than 1 per cent while Nigerian companies are borrowing at over 18 per cent and more.”
”This will cripple our competitiveness and have us remain as an importing nation,” he said.
The CBN for the umpteenth time spanning about 15 months, retained the MPR at 12 per cent, citing inflationary tendency.
Further examining the nation’s macro-economics, the group lamented the fall of the nation’s Gross Domestic Product, GDP, within the last two quarters of the year and also the persistent fall in external reserve savings.
”GDP growth rate drop from 6.56 per cent in the first quarter of 2013 to 6.18 per cent in the second quarter, which means that growth has slowed down a little bit,” Mr. Abubakar said.
On the recent Central Bank policy on increment of Cash Reserve Requirement (CRR) on public deposits from 12 per cent to 50 per cent, NACCIMA warned that the policy is ”already threatening stability in the financial system.”
It urged the CBN to review the CRR on public sector deposits downward to around 20 per cent or 25 per cent, ”so as to reduce the shock on the financial system and avert another round of distress in the banking sector.”
No desired result
Taking a swipe at on the ongoing reform agenda of fertilizer distribution by the Ministry of Agriculture, the NACCIMA president wondered why Nigeria is still importing rice.
“The efficient distribution of fertilizers is good but is it achieving the desired result?”, and why are we still importing rice” he asked.
”Government’s intervention with respect to infrastructural facilities and incentives to boost real investment in the sector, have not achieved significant positive impact as desired, as the country still grapples with low productivity, low profitability and competitiveness, insufficient food for local consumption and poor value chain.”
He enjoined the federal government to invest massively in research and development of in agricultural research institutes ”to develop high yield seedlings and cheaper farming techniques, which will enable us to produce at cheaper rates thereby enhancing our competitiveness in the global market.”
The Minister of Agriculture has repeatedly touted the administration’s achievement in eradicating corruption in the distribution of fertilizers to farmers. But Mr. Abubakar claims such policy is yet to deliver the ”desired outcome”, adding that what is required now is the re-capitalisation of the agricultural bank and massive research and development.
According to the NACCIMA boss, “the biggest incentive to agriculture is a cut in interest rate” he affirmed, adding that “emphasis must be placed on research and development to enhance the cost of production to be lowered because other countries are efficiently developing better quantity and quality of crops, using lesser space.”
Despite claims by the Minister of Finance that the 2013 budget is being implemented adequately -a claim also contested by members of the National Assembly-, NACCIMA observed that both state and federal governments do not implement the budget beyond 60 per cent every year due to the late passage and signing of the appropriation bill.
NACCIMA emphasised the need to ensure that national/state assemblies adhere strictly to the “extant practice of timely crafting, presentation, debate, passage and signing of their annual budgets latest by mid-December and for the President/Governors to announce same to the citizens on 1st of January of every year so as to forestall dislocation of proper planning by government MDAs and business operators whose public/business plans and projects are directly dependent on the polices and provisions of the annual budgets.”
This call is coming just as the presidency and national assembly are currently embroiled in crisis over the oil benchmark for the 2014 budget, hence series of delays in presenting the budget by the President.
Another issue the private sector is not pleased with the government is perpetual failure to address port congestion.
Mr. Abubakar expressed his concern about achieving the promised 24 hours cargo clearance.
He decried the failure of making the nation’s port a hub for carbotage, a role he claims the port of Dakar in Senegal and port of Lome have assumed with the efficient discharge and redistribution of ships in the west African sub-region.
”Public-Private Partnership (PPP) arrangement is suggested for the development of new ports” the body advised.
It also sought the merger of agencies such as National Agency for Food and Drug Control (NAFDAC) with the Standard Organisation of Nigeria (SON), the National Airport Management Agency (NAMA) with Nigerian Civil Aviation Authority (NCAA), claiming such a merger will save government some funds and limit the ongoing duplicity of expensive functions.
It, however, commended the privatisation of Power Holding Company of Nigeria and called for the same to be done to the nation’s four refineries.