The Centre for the Promotion of Private Enterprise (CPPE) has called on President Bola Tinubu’s administration to swiftly implement measures aimed at mitigating the challenges brought about by recent reforms. Muda Yusuf, the Director of CPPE, emphasized the need for a combination of direct interventions and tax incentives for low-income employees and small businesses. He also advocated for a reduction in import duties on critical intermediate products in key sectors such as transportation, health, power, and energy.
Yusuf highlighted the importance of implementing these mitigating measures urgently to ensure that the ongoing reforms have a human face. He commended the Tinubu administration for steering the economy in a new and positive direction, which promises bright prospects for recovery and growth. The recent reforms have already contributed to increased investor confidence, improved fiscal space for the government, greater prospects for exchange rate stability, and positive expectations for better economic governance. The short to medium-term outlook for forex liquidity is optimistic, with expectations of increased capital inflows.
However, Yusuf stressed the urgent need to address the social consequences of the reforms, particularly the inflationary pressure resulting from the removal of fuel subsidies. Measures must be implemented swiftly to alleviate the rising cost of living and the escalating operating and production costs faced by businesses.
He cautioned that inflationary pressures may intensify in the near term and could put pressure on the exchange rate as the backlog of forex demand affects the official foreign exchange window. Nevertheless, Yusuf expressed confidence that the improved fiscal space would lead to lower fiscal deficits, a moderation in the growth of public debt, a reduction in the burden of debt service, and an overall improvement in macroeconomic stability.
Yusuf anticipated that the pressure would ease before the end of the year, paving the way for a more sustainable and tolerable equilibrium exchange rate. He also called on the Central Bank of Nigeria to establish a sustainable intervention framework to manage volatility in the forex market.
These measures are expected to have a significant impact on economic growth prospects in the second half of the year, providing stability and laying the foundation for sustained recovery and progress. The CPPE’s plea for timely and effective interventions reflects the broader sentiment among stakeholders who recognize the need to balance economic reforms with social considerations to ensure a fair and inclusive transition.