Worried that the popular saying that when two elephants fight the economy would suffer, a captain of industry has called on Federal Government to tread carefully on the reciprocal war between Federal Government and United Kingdom government.
Weighing the economic implications, the CEO, Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf enumerated some of the economic implications.
He counselled Federal Government of the need to recognize the vulnerabilities of the Nigerian economy and remember that economic growth remains fragile before taking any action.
According to him: Principle of reciprocity is a common response strategy to express approval or disapproval international relations. But this should be guided by the realism of the costs and benefits of such an action.
Of course, issues of nationalism and assertion of our sovereignty are evident manifestations in the current face off. However, there is a good chance that the cost to Nigeria of recent wave of reciprocity actions would be disproportionately higher, especially for SMEs involved in international trade, families with loved ones outside our shores, diaspora Nigerians and foreign investors. The hospitality and travel industry which is yet to recover from the shocks of the pandemic and the lockdowns would also be a major casualty.
The nationalistic and sovereignty arguments are valid and legitimate.
But the economic, business and diplomatic ramifications need to be considered in the invocation of the reciprocity theory. These are consequences that transcend the jurisdiction of the Aviation Ministry. This underscores the need for robust consultation and inclusion in deciding the appropriate and strategic course of action.
The issues are fast degenerating from a health issue to a diplomatic or political narrative.
In all of these, we need to recognize the vulnerabilities of the Nigerian economy. Economic growth remains fragile. Many small businesses are still reeling from the shocks of the pandemic and the associated recession.
Investors are still grappling with headwinds inflicted by macroeconomic and regulatory shocks. There is little headroom to absorb further shocks. The risk to the economy and small businesses [particularly those that are active in international trade] is quite high.
The nationalistic passion expressed by the Minister of Aviation is understood. But the economic, business and diplomatic consequences should be adequately taken into account. The Foreign Affairs Minister and the Industry, Trade and Investment Ministry should also weigh in on this matter. A strategic and inclusive approach in dealing with the issues are imperative to minimize the disruptions, dislocations and costs to the businesses and the economy, without compromising our sovereignty and national interests.
Furthermore, institutional issues bothering on the integrity of the PCR tests and certificates issues to travelers need to be urgently addressed. Such institutional weaknesses could impact on the credibility of the processes and become a source of embarrassment to the country.
By Dr Muda Yusuf CEO Centre for the Promotion of Private Enterprise (CPPE)
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