The Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, has advised the Nigerian government to give more consideration to the welfare of Nigerians in the implementation of its economic stabilization policies.
Reacting to the recent report of the IMF Article IV on Nigeria on Sunday, Yusuf welcomed IMF’s positive assessment of Nigeria’s economic reforms, which had yielded positive results like the stabilization of the foreign exchange market, improvement in external sector balances, strengthened investor confidence and restored a measure of policy credibility.
He, however, expressed regret that the economic measures had not translated into expected positive outcomes like lower food prices, better jobs, improved incomes and enhanced living standards.in spite of their achievements on the economy
According to Dr. Yusuf, the economic reforms should not only be judged by their impact on macroeconomic indicators, but also by their ability to improve the welfare of citizens.
He noted that even when these economic policies had yielded positive effects, they had also had their negative consequences on Nigerians.
“CPPE is concerned about the continued emphasis on high interest rates without sufficient consideration of the adverse consequences for investment, enterprise growth, job creation and sovereign debt service pressures.
“The current monetary policy stance has delivered some benefits in terms of inflation moderation and exchange rate stability. However, every policy instrument has a point of diminishing returns. Beyond that point, the costs may begin to outweigh the benefits.
“The cost of credit in Nigeria has reached levels that are becoming increasingly prohibitive for productive investment. Lending rates remain among the highest in the world, making it difficult for businesses to expand, invest or create jobs,” he said.
The CPPE boss therefore urged the Nigerian government to focus on converting the economic gains into welfare gains as the next phase of the reforms.
“The next phase of economic management should therefore focus on converting macroeconomic gains into welfare gains. The challenge before policymakers is no longer merely one of economic stabilization; it is increasingly one of inclusive prosperity,” he said.
He urged the government to thinker with some of its economic policies so as to deliver improved welfare gains to the people.
According to him, the government should reconsider its continued emphasis on high interest rates without sufficient consideration of the adverse consequences for investment, enterprise growth, job creation and sovereign debt service pressures.
“The cost of credit in Nigeria has reached levels that are becoming increasingly prohibitive for productive investment. Lending rates remain among the highest in the world, making it difficult for businesses to expand, invest or create jobs.
“High yields on government securities have also intensified the crowding-out effect in the financial system.
“Banks and investors are increasingly channeling resources into treasury bills and government bonds rather than financing productive sectors of the economy.
“As a consequence, capital is gravitating towards financial assets rather than productive assets.” he added.
GIK/APA.