In a call to action aimed at the Tinubu administration, the Center for the Promotion of Private Enterprise (CPPE) has highlighted the need for urgent measures to address the negative impact of domestic reforms on key sectors of the Nigerian economy. Muda Yusuf, the Director, and Chief Executive Officer of CPPE emphasized the importance of reducing import duty on critical intermediate products for key sectors, such as transportation, health, power, and energy, to mitigate the escalating operating and production costs faced by businesses.
According to the CPPE’s Half Year Economic Review, several sectors, including agriculture (specifically the livestock sub-sector), oil refining, textiles, rail transportation, and insurance, experienced contraction during the first half of 2023. These sectors faced significant headwinds, including the naira redesign policy implemented by the Central Bank of Nigeria (CBN), persistent dysfunctional foreign exchange policies, political transition processes, weak oil production recovery, and the ongoing challenge of insecurity in certain parts of the country.
While some sectors, such as manufacturing, food and beverage, chemical and pharmaceutical, vehicle assembly, road transport, ICT, financial institutions, and real estate, demonstrated positive growth during the same period, the CPPE emphasized the need for immediate interventions to address the current challenges faced by businesses and mitigate the soaring cost of living.
Yusuf highlighted the potential intensification of inflationary pressures and short-term exchange rate fluctuations due to a backlog in forex demand. However, he expressed optimism that these pressures would ease before the year’s end. He called on the Tinubu administration to implement a mix of direct interventions and tax incentives for low-income employees and small businesses. Additionally, he emphasized the importance of reducing import duty on critical intermediate products for key sectors, which would stimulate growth and provide much-needed relief to businesses.
Furthermore, the CPPE urged the Central Bank of Nigeria (CBN) to establish a sustainable intervention framework to manage volatility in the forex market, thereby paving the way for an equilibrium exchange rate that is both tolerable and sustainable in the long run.
With the Tinubu administration poised to chart a new economic course, the CPPE’s recommendations seek to create a favorable environment for recovery and growth, while also addressing the pressing challenges faced by businesses and the wider population.
