In a critical assessment of the impact of major policy reforms by the Tinubu administration, Andrew Uviase, Managing Partner of Ecovis OUC (Chartered Accountants), a leading consulting firm specializing in tax, accounting, auditing, and compliance services, explains why market forces should not be completely allowed to determine the value of the Naira as well as the need to fix the nation’s refineries before fuel subsidy removal. He also speaks on the significance of Kreston OUC’s transformation into Ecovis OUC for the Nigerian business community.
‘Fixing refineries should come before petrol subsidy removal’
By Babajide Komolafe, Economy Editor
In a critical assessment of the impact of major policy reforms by the Tinubu administration, Andrew Uviase, Managing Partner of Ecovis OUC (Chartered Accountants), a leading consulting firm specializing in tax, accounting, auditing, and compliance services, explains why market forces should not be completely allowed to determine the value of the Naira as well as the need to fix the nation’s refineries before fuel subsidy removal. He also speaks on the significance of Kreston OUC’s transformation into Ecovis OUC for the Nigerian business community.
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What is your assessment of the current administration in terms of its handling of economic matters?
Ecovis coming in at this time is part of our little way of joining forces with the current administration to turn things around. Quite frankly 100 days is too short in the life of an administration to be able to correctly access the impact of its policies. However, we can say that so far so good. We must commend the bold steps taken by the current administration thus far in the area of fuel subsidy removal, inauguration of tax reform committee and the foreign exchange liberalisation policies. We believe that if the policies are properly managed and implemented, the economy will soon begin an upward swing.
Several economic agents appear to be worried about the forex market especially considering the apparent fallen value of the Naira. What do you think is wrong and what can be done?
I think the policy of the current administration is to allow market forces of demand and supply to determine the value of the Naira. Theoretically, market forces are the most suitable mechanism for allocating scarce resources and for correcting distortions in the FX market. However, this position rests on a critical assumption of many economic agents on both the demand and supply side. That is the assumption of perfect competition. Unfortunately, the assumption does not hold for the FX market because whereas there are many people on the demand side, supply is inelastic because of the productive base. Therefore, supply will not increase in response to price. Increases in price (I mean lowering the value of the Naira), in relation to other currencies, can only lead to inflation as we are presently witnessing because we do not have the productive base to earn more dollars. This is what we call market failure which is the inability of the market to allocate resources efficiently. I will therefore strongly recommend that government should revert to a managed float by channeling our scarce FX resources to the productive sectors.
What are the implications of the removal of fuel subsidy on the Nigerian economy?
This is one of the best things that have happened to the economy in recent times. The removal has in the short-term freed resources for government at various levels to run the country. In the long term, it will also help us to channel resources to the more productive sectors of the midstream/ downstream subsectors of the oil and gas industry. However, it has created inflationary pressures and general difficulties in the country. Sometimes, I tend to believe that it would have been better to address the supply side by fixing the refineries before removing fuel subsidy. This is so because what we have now is more difficult to manage. We have fuel import exacting pressure on foreign exchange which puts pressure on fuel price which again increases the cost of import, and the cycle continues. At this rate, it is increasingly becoming more difficult to control the price without some form of government intervention.
Overall, how do you think that the challenges of development can be overcome in Nigeria?
Personally, I tend to think that the greatest impediment to our development is a lack of discipline. Specifically, we must return to the discipline of planning where there is a deliberate effort to set quantifiable targets over a given period of time. Moreso, government must be seen as a continuum when an incoming government sees the policies and programmes of its predecessor as national matters that must be driven to a logical conclusion. Historically, we can see that the greatest developments in the country happened during the period of development plans in the 70s.
Can you explain the significance of Kreston OUC’s transformation into Ecovis OUC for the Nigerian business community?
Certainly. This transformation marks a pivotal moment for the Nigerian business landscape. By adopting the name Ecovis OUC, we align ourselves with the global Ecovis network, renowned for its continental European heritage and exceptional expertise and service delivery. This transition brings together international excellence with local insights, offering Nigerian businesses unparalleled consulting services tailored to their unique needs and challenges.
What benefits can Nigerian businesses expect from this rebranding?
The benefits are manifold. Firstly, our integration into the Ecovis network grants Nigerian businesses access to a wealth of international expertise, while retaining the advantage of local insights. This ensures a seamless navigation of both global and local intricacies. Secondly, our bespoke solutions cater comprehensively to businesses of all sizes, addressing, fiscal, managerial, and administrative concerns.
Moreover, the personalized consultation we provide, supported by a network of over 10,000 experts worldwide, ensures clients receive well-rounded solutions for their distinct challenges. At Ecovis, our strength lies in our ability to truly understand our clients, extend a helping hand, and communicate in a language that resonates with them. We go beyond the role of mere advisors; we aspire to be genuine business partners. Our aim is not only to assist clients in navigating challenges or finding solutions but to proactively showcase the potential that can drive their success. This proactive approach is embedded in our DNA. When we speak of partnering with our clients, we also mean that the entire Ecovis network partners with them. This collaboration ensures that wherever their ventures take them, we are there as guides, facilitating well-informed business decisions. Our commitment to our clients is unwavering. We take the time to truly know them, immersing ourselves in their operations, understanding their organizational intricacies, and meeting their unique demands. Our connection to the extensive Ecovis network across the globe empowers us to cater to their requirements across different jurisdictions whenever the need arises.
How does Ecovis OUC’s transformation impact businesses on a local level?
The transformation to Ecovis OUC presents Nigerian businesses with a distinct “home advantage.” Operating in over 80 countries, including Nigeria, we are poised to offer immediate international and local support.
Whether yours is an established international business dealing with cross border issues, a family owned company, the branch of a major corporation or a government organisation, ECOVIS is at your side wherever your business takes you.
With Ecovis, you will always have a home advantage. Being there means less communications hassle and increases our understanding of your special situation.
We aim to work in partnership with businesses to provide the support and accessibility of a small company with the wealth of experience that can be expected from a global organisation. This obliterates communication barriers and bolsters our comprehension of the local business terrain, allowing us to seamlessly provide bespoke solutions aligned with the Nigerian context and International realities.
In what ways will Ecovis OUC contribute to the growth and success of Nigerian businesses?
Our mission is to empower Nigerian businesses to excel on both local and global fronts. By uniting international expertise with local insights, we equip businesses with the tools to surmount challenges and seize opportunities. Whether it’s tax consultation, accounting, auditing, or compliance advice, Ecovis OUC is committed to delivering comprehensive solutions that foster growth and success.
