The president and Chairman Governing Council, Institute of Directors (IoD), Mrs. Ije Jidenma, has warned that the rising security, lingering forex illiquidity, low level of vaccination rate and lack of will to follow through critical reforms by the fiscal authorities would constitute the major downside risks to Nigeria’s short-term growth prospect.
At a webinar organised by the Institute tagged; “The Directors’ prospects for 2022: What will change and what you should do,” Jidenma said recovery in 2022 will be impacted by the effective management of the pandemic, the proper management and spread of vaccinations, the direction of the global oil market and the quality of government policies and programmes.
According to her, the 2022 National budget which was tagged the “Budget of Economic Growth and Sustainability,” has a spending plan of N16.39 trillion, which is 25 per cent higher than the N13.6 trillion projected for 2021, stressing that the GDP growth rate projection of 4.2 per cent is considered overtly optimistic compared to the revised projection of 2.5 per cent for 2021 which was hardly achieved.
“The Institute of Directors Nigeria (IoD), as parts of its mandate, especially to the Nigerian business community, deemed it necessary to provide this platform aimed at beaming searchlights into the prospects for 2022. We believe that there is a need to foray into what these postulations would mean for businesses and by extension, for directors in various sectors of the economy and also provide insights that should shape Directors’ decisions,” she added.
She noted that the Institute hopes to facilitate robust discussions and deliberations on the performance of the economy in 2021 and projections for 2022, create opportunities and facilitate a conversation between stakeholders in the business and financial community on the likely impact of the 2022 budget on businesses and the economy.
“We hope to highlight practical issues, opportunities and pitfalls inherent in the 2022 business year,” she stressed.
The IoD boss added: “The Institute also aims to emphasize policies and regulations that are new and emerging on the fiscal and monetary space and to enlighten the participants and provide dynamic strategies which businesses can implement for a better outcome in the current year.”
Also speaking, Chief Executive Officer, Economic Associates, Mr. Ayo Teriba, called for the optimisation and valuation of Nigeria’s assets to engender budgetary funding for a more liquid, stable and growing socio – political economy.
The economist said that global trends reflected that the country would gain more from valuation particularly of its idle corporate assets, than outright sales.
He said that annual spending must be funded in full to ensure that Nigeria’s medium term plan was actualised.
He stressed that the country’s quality of debt must be tied by securitising payments to some of these assets.
“The surest path to full and effective funding of annual budget and five year plan is to turn to our portfolio of national assets, and unlock liquidity from them. Non-tax revenues are more promising as Nigeria’s plethora of assets that offer huge non-tax revenue potentials remain unexploited. There is need to know the market value of your corporate assets and there is more to gain from value enhancement of our cities and prime urban land should be exploited as well, “he said.
Responding, the Director-General, Budget Office of the Federation, Mr Ben Akabueze, said the 2022 revenue projection was not based on taxation but on oil and other revenue generation dynamics.
Akabueze added that the budget, which was aspirational and realistic was prepared on the premise that petrol subsidy would last up till June, 2022.
He noted that the subsidy reversal would create a N1.3 trillion gap in the revenue projections for the year.
The Fiscal Policy Partner and Africa Tax Leader, Pricewaterhouse Coopers, Mr Taiwo Oyedele, stressed the need to use data and technology to get intelligence to ensure that all tax payers are pull into the tax net.
He also called for the harmonisation of tax bodies to ensure proper remittances to government and address issues of structural tax inequity.
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