•Laments high cost of living, debt, others
By Gabriel Ewepu
At the backdrop of the debates surrounding the success or otherwise of the two and half year old economic reform exercise of the current Federal Government, FG, the Executive Director, Centre for Promotion of Private Enterprises, CPPE, Dr Muda Yusuf, asserted that the economic reforms by the Tinubu-led administration has placed the economy on the right path.
His words: “There are clear indications that the current economic reforms have delivered some very positive outcomes, and this is more pronounced with respect to the macroeconomic stability that the economy has been experiencing.
“We are seeing very significant stability in the exchange rates and even on top of that we have been seeing a marginal appreciation of the currency.
“We are also seeing a deceleration in the inflation rates, even with discounts for the fact of adjustments of the base year, the base effects.”
Speaking on direct impact on citizens’ livelihood and general cost of living, Yusuf stated: “Generally, I think there are clear indications that prices are trending gradually downwards.
There are also evidence that even food prices are coming down. With respect to some products, we are not just talking about a disinflation regime, we are talking about deflation.
“Deflation is about reduction in price, disinflation is about reduction in the inflation rates, and even for some commodities that are manufactured, that are import-based, some of those prices are coming down.
“And this is why we see that indicators around business confidence has been improving, even though consumers’ confidence still remains fragile.
“Then we are seeing indications around our balance of payment position. Balance of payment position is also improving.
“We are seeing more surplus in our balance of payment position, and generally, the confidence level among businesses has also been elevated. Businesses that suffered, and posted serious losses in 2023 many of them have returned to profitability.
“So, these are indications that we are on the right path as far as the economy and economic management and economic reforms is concerned. But we must realize that economic reform is a journey, and it’s not something that can solve all the problems within a space of two years.
“The reform is meant to fix a broken economy because the economy was practically broken, particularly from a macroeconomic point of view, and that is what the reforms have been designed to correct.
“But admittedly, the reform has brought about some significant negative impact on the welfare of the people because of the inflationary implications of the reform. But just as I said, it’s a journey. We have achieved stability.”
Cost of living, inclusivity
However, despite the positive trend, the CPPE boss believes the government should do more in bringing down cost of living and ensure wider members of the society feel the positive impact of the reforms.
Yusuf said the government should focus seriously on bringing down cost of living and ensure inclusivity in its economic growth plan.
His words: “I think the new focus now for economic managers will be to focus on bringing down the cost of living.
“We need to focus on accelerating economic growth, and not just economic growth, economic growth that is inclusive that will help to elevate, reduce the level of poverty, that will create jobs. That is what we desire to see.”
Reduce debt
He also urged the Tinubu-led administration to reduce dependence on taking loans instead look inwards to the revenue prospects to change the narrative.
He said, “And of course, we also need to worry about our debt situation as much as possible. We need to moderate the rate of growth of our debts because the debt service position is also of concern. It’s exerting a lot of pressure on the fiscal space.
“And as the revenue prospects improve, we expect dependence on debt to also reduce. That way, we are guaranteed that the stability that we have achieved will be sustainable, and we will also be confident that some of the results that we have seen will also be sustainable.
“So addressing the cost of living issue, I think, is one topmost priority that I believe the government should address. And this will require the deployment or adoption of a combination of policies.”
Targeted policy instrument
Meanwhile, the CPPE boss asserted that the Tinubu-led administration should have targeted policy instrument that would address cost of living that has made life hard for Nigerians.
“Fiscal policy, tax policy, monetary policy, investment policy, and trade policy. A combination of these policies are necessary to ensure we have targeted policy instruments to tackle the problem of the cost of living, cost of food, cost of energy, cost of transportation, cost of health care, and cost of education.”
Prioritize, support infrastructure
Yusuf also recommended that there is the need for government to ensure prioritization and support for investment infrastructure as a way to sustain the current improvement of the economy.
“And also, proper prioritization to support investment in infrastructure. That is extremely very important.
“So if we do this, all of this can complement the gains that we have seen so far, and we put the economy on a much stronger path of recovery and growth.”
Reforms are credible, needed for sustainable growth, devt – Olayinka
…faults the implementation
Also reacting to the Federal Government’s positive verdict on its reforms outcomes, Tajudeen Olayinka, Investment Banker & Chartered Stockbroker, said the reform policies are not only credible but were needed to reset the economy and put it on the path to growth and development.
However, Olayinka believes the implementation of the reform measures has been faulty.
His words: “The credibility of any economic reform is in the soundness and adaptability of the program itself. The more adaptable a program is the better for the economy.
“The economic reform was necessary at the time it was conceived by the government but hasn’t been comprehensively implemented in a way. “There are still some supply-side issues that have not been dealt with in the most appropriate manner, which may become a drag on achievement made so far.
“So, I expect the government to begin to consider other supply-side factors to replace those short-term measures they earlier put in place that helped to push inflation down. “Again, the reforms are credible but more still needed to put the economy on a pathway to sustainable growth and development”.
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Source: Economic Reforms: We’re on the right path – Muda Yusuf
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