A cross-session of analysts who have attempted an economic forecast for the year 2021 have lamented that there may be nothing to cheer about yet as current parameters all show a negative trend.
Firing the first salvo, Dr. Muda Yusuf, the Director General of the Lagos Chamber of Commerce and Industry (LCCI) said key sectors of the economy will come up against still competition and would require more concerted efforts on the part of all to tide things over.
“What we are about to see is an economy that is going to be much more competitive than what it is now and for that to happen, some of the issues that we have always raised about the investment environment needs to be taken more seriously in 2021,” he said.
Pressed further, the LCCI boss said, the oil and gas sector for instance is in dire need of reform if it must survive going forward.
“The reforms that the government is undertaking the government should also show more commitment to those reforms. They are talking of reforms in the oil and gas sector, but we are not seeing the investment we should see in that sector. We have been in the oil business for over 50 years, if you compare the period we have been in that sector and the amount of investment invested in that sector, you will know that we have not performed well at all.”
Echoing similar sentiments, Muda’s counterpart at the Manufacturers Association of Nigeria (MAN) Dr. Segun Ajayi Kadiri, while noting that there is need to be optimistic in the midst of all the negative indicators, said chief among the concerns for 2021 is the second wave of Covid-19 which is rearing its head.
“As a matter of fact, let me say about one and a half of just only two sectors out of the 10 sectors are able to operate for the most part of 2020. So you can imagine the state we are in. We cannot afford another lockdown in 2021. The government has to do its best to ensure adherence to Covid-19 protocols and how they can manage the economy without shutting it down,” he stressed.
In the view of Chief (Dr.) Kolawole Adewoyin, the National President of Independent Petroleum Marketers Association of Nigeria (IPMAN), the parlous state of the economy including the rising cost of petroleum products is as a result of the nation’s moribund refineries which has led to importation and the attendant cost.
“As at now, it is only the NNPC that is importing fuel and they are given concession in the area of forex. So the major and independent marketers none of them are importing yet because there is no profit. But there is lot of things government can do to make the sector attractive to investors. That is our expectation. The capital we are investing is been dried up by the overhead cost even the little margin we are making is not bankable. Banks are no longer granting us facilities because of the high risk-nature of the business. For instance, a truck we used to buy for N1.8m increased to N2.5m, N3.5m now it’s over N5m to bring a truck load of PMS from the depot. Whereas the cost of PMS has skyrocketed, the margin we are getting remains very infinitesimal. So we’re getting poorer and poorer.”