Lagos, Oct 1, 2023: The Centre for the Promotion of Private Enterprises (CPPE) says Nigeria’s years of uninterrupted democracy reflect a relative political stability which is good for investors’ confidence.
Its founder, Dr Muda Yusuf, made the assertion on Saturday in Lagos ahead of the nation’s Independence Day on Oct.1.
Yusuf said that the Nigerian economy had recorded average growth performance over the past decades, although with a few instances of slow growth.
He, however, noted that the challenge of creating inclusive growth trajectory remained a major concern.
According to him, while the economy experienced some positive growth trend over the past six decades, especially in the oil boom era, the impact on poverty, inequality and job creation has been very minimal.
“Over the past six decades the Nigerian economy has transformed from a basically agrarian economy to an economy driven largely by services and oil and gas.
“The service sector contribution to employment generation and revenue to government has risen phenomenally over time.
“The economy has also witnessed considerable changes in the Information and Communication Technology (ICT) sector and this has impacted many sectors through the digitalisation of their processes and systems.
“The entertainment sector has grown in leaps and bounds over the last decade and has become a key sector to be reckoned with globally.
“Unlike what obtained at independence, the economy has witnessed incredible private sector footprints in many sectors and the contribution of the Nigerian private sector to the Nigerian economy has grown in leaps and bounds over the years,” he said.
Yusuf said the country’s macroeconomic management framework continues to pose serious challenges and was a major source of concern to investors in the economy.
He noted that high infrastructure deficit, cargo clearing challenges, high transactions cost at the ports, weak productivity in the real sector, regulatory challenges and policy inconsistency beguiled the economy.
Yusuf added that persistent importation of petroleum products continues to put pressure on foreign reserves and weakened the capacity of the Central Bank of Nigeria (CBN) to support the foreign exchange market.
“The fiscal position of the federal government and the states are very weak, characterised by high ficals deficit , high and increasing debt profile and the associated debt service burden is a cause for concern.
“The state of insecurity continues to take its toll on the economy, especially on agricultural output and fueling food inflation. It is also impacting the confidence of investors.
“The spate oil theft and the associate leakages of government revenue is very troubling as billions of dollars have been lost to this apparent failure of security effectiveness in the oil producing areas,” he said.
On the way forward, the CPPE boss emphasised the need for urgent steps to be taken to ensure a better macroeconomic management framework to stabilise the exchange rate and to stem the current depreciation of the Naira.
Yusuf said strategies must be strengthened to attract private sector capital to compliment government financing of infrastructure with steps taken to attract foreign exchange via new investment opportunities.
“There’s also the need to reduce debt financing levels especially the reliance on commercial debt to fund government operations.
“Nigeria must also review its trade policy to support investment growth and investment sustainability while tax policy must support investment not become a disincentive to investment.
“The security situation which has continued to deteriorate needs to be urgently addressed in order to mitigate the effects on investors’ confidence.
“There should be greater emphasis on quality intelligence in the war against terrorism,” he said.