The Organised Private Sector in Nigeria has supported the recent position of the International Monetary Fund (IMF) that excluded Nigeria from the list of countries making notable progress in macroeconomic reforms.
Recall that the IMF’s Deputy Director, Catherine Patillo, presented a report at the Lagos Business School recently and revealed that while the region’s average growth rate was pegged at 3.6 per cent for 2024, Nigeria’s 3.19 per cent fell below this benchmark.
The report also praised countries like Ghana and Zambia for their fiscal consolidations, further underlining Nigeria’s struggles to yield tangible outcomes from its reforms.
Reacting to the IMF’s report on sub-Saharan Africa’s economic performance on Monday, the Manufacturers Association of Nigeria and the Lagos Chamber of Commerce and Industry described the assessment of Nigeria’s economic reforms as a wake-up call for urgent government action.
The Director-General of MAN, Mr. Segun Ajayi-Kadir, acknowledged the IMF’s position, stating it aligned with the realities faced by businesses in Nigeria.
“It is evident that the expected relief from the negative impacts of the reform is yet to fully kick in. We are only seeing an escalation of those factors: the floating of the exchange rate has not brought the expected stability, petroleum product costs are rising, and inflation remains stubborn despite increasing interest rates,” Ajayi-Kadir said.
He emphasised that the manufacturing sector was still heavily constrained, adding “The productive sector must be insulated from the adverse impacts of these reforms. We expect deliberate efforts by the government to accelerate support for manufacturing and mitigate these impacts, at least by the last quarter of this year or the first quarter of 2025.”
Ajayi-Kadir called for prioritising fiscal and energy reforms, incentivising alternative energy sources, and addressing insecurity to unlock Nigeria’s economic potential.
He urged Nigerians to also focus on state-level contributions, stating, “There are at least 37 budgets in this country. State governments must deliberately promote manufacturing and resource beneficiation to build infrastructure and foster growth.”
“The government must take full control of the situation and work collaboratively with sub-nationals to deliver results. Nigerians deserve to see the dividends of these sacrifices sooner rather than later,” the Punch newspaper report on Tuesday quoted Ajayi-Kadir as saying.
The report added the LCCI President, Gabriel Idahosa, noted that the IMF’s assessment was no revelation to local stakeholders but stressed the importance of staying the course.
“The IMF isn’t saying anything new; they’re just summarising what we have always said. For us as a country, the focus should be on maintaining the slow but modest progress being made. Reforms like fuel subsidy removal and currency unification are critical, and their benefits will crystallise by the end of next year,” Idahosa said.
He highlighted ongoing developments in the oil and gas sector, particularly efforts to combat oil theft and increase production capacity to 2 million barrels per day. Idahosa also pointed to strides in gas infrastructure, electric vehicles, and compressed natural gas adoption as signs of progress.
“The faster we transition to gas-fired and electric vehicles, the quicker inflationary pressures will ease,” Idahosa explained. “By 2025, the benefits of localised crude processing and reduced freight costs will begin to materialise, lowering operational costs for businesses.”
Also reacting to the development, the National President of the Association of Small Business Owners of Nigeria, Dr Femi Egbesola, said most Micro, Small, and Medium Enterprises, stated that the recent economic reforms have not brought much yield to the economy.
He said, “We totally agree with the IMF’s report at this time, recent economic reforms haven’t yielded many positive outcomes yet.
“Inflation continues to soar, naira is still on a free fall, businesses are either ailing or shutting down, the poverty level is deepening and ease of doing business is dropping on the ladder.
“These administration economic reforms may need to be overhauled, Nigerians are suffering. We expect much more positive outcomes from this government.”
GIK/APA