A former Director General of the Lagos Chamber of Commerce and Industry (LCCI), Dr. Muda Yusuf, has highlighted some pathways to reposition the strained Nigeria economy.
He made the suggestions yesterday as the lead Speaker at the City Business News Summit held at the Oriental Hotel, Lagos.
According to him, some of these measures are directly or indirectly related to factors like fuel subsidy removal, forex rates Unification, power sector decentralisation, public sector management etc.
Though he noted the benefits of the fuel subsidy removal, he nonetheless stated that “we should acknowledge the challenges that followed the fuel subsidy removal.
“The increase in PMS price was a huge shock to the economy, investors and the citizens on the back of escalation of energy cost.
Triggered intense inflationary pressures; Profound adverse impact on the welfare of the citizens – food prices, transportation costs; Poverty level increased; Middle class disappearing; Profit margins of many businesses have been considerably eroded due to high operating costs which are not transferable to consumers.”
On the forex isssue, he said “Another major reform that the Tinubu administration introduced was the convergence of rates between the official forex window and the free market rate.
“This had also been beneficial in the following ways: Better transparency: Positive impact on forex liquidity in the short term; Better prospects for forex inflow; More revenue for government; Better prospects for growth of non-oil sector.”
He however stated that the downside of this measure include “Spiral inflation on the back of sharp depreciation in the naira exchange rate; Resurgence of speculative pressure on the naira, amid weak external reserves; Rates began to diverge few weeks after the convergence of rates; Currency flight to the dollar as store of value.”
On the way forward, Muda Yusuf who is currently the Chief Executive Officer, Centre for the Promotion of Private Enterprise, advocated for the rebuilding of investors confidence.
“Investors’ Confidence Building beginning with the clearing of backlog of forex mature obligations; Boosting reserves through enhanced crude oil production; Deepening of import substitution to ease forex demand pressure, especially with regards to petroleum products importation.”
Other measures according to the Economics expert include-Leverage government assets to enhance inflows through equity investments; Incentives FDI and FPI flows; Curbing speculative activities through better oversight and surveillance of the deposit money banks, among others.
Other dignitaries who graced the event include the
Chairperson of Women in Logistics and Transport (WILAT), Hajia Khadijat Sheidu-Shabi; the Managing Director of Nigeria Exchange Group Plc, Mr. Oscar Onyema; and the former CEO of Nigeria Shippers’ Council, Barr. Hassan Bello etc.