Nigerian economy needs structural reforms — Stakeholders
According to stakeholders, rather than depending on short-term relief measures, the Nigerian economy urgently requires structural reforms to ensure sustainable growth.
They clarified that deeper economic problems like inflation, unemployment, and growing living expenses were not addressed by the government's palliatives, which simply provided short-term respite.
They contend that these palliative measures fall short in addressing the root causes of the nation's poverty and instability.
"What I believe the government can do differently is to develop policies that can reduce costs," stated Dr Muda Yusuf, the CEO of the Centre for the Promotion of Private Enterprise. In general, the cost of goods in the economy is lowered by production and transportation expenses.
"These palliatives are insufficient and unsustainable. How many people is the government able to provide palliative care for? While providing palliatives like rice and maize is symbolic, it has no real impact in a nation where more than 100 million people live in poverty.
Yusuf believes that the government ought to implement more fiscal policy initiatives.
"I think that a lot of this issue is coming through the channel of exchange rate depreciation if you have a weak exchange rate," he said.
He maintained that a high import tariff regime was unnecessary given the already poor exchange rate.
"The government should drastically reduce import duties, possibly by 50%, especially on essential items that impact people's livelihoods, to ease pressure on citizens," Yusuf said.
Yusuf added that lower prices for goods and services might result from the Federal Government's ability to slash import tariffs.
According to Yusuf, lowering import taxes on cars would drastically cut expenses, which are now about 35%. He said that extra fees might push that figure up to about 40% for some car types.
The situation was already dire because of high fuel prices, the economist said, adding that many people, including those in the middle class, could no longer afford to buy cars, even smaller ones.
"The critical reform is around energy prices and foreign exchange," Yusuf said. Second, I think we need to acknowledge that subsidies are still necessary for emerging economies.
"The subsidy might not originate from fuel, but let the government also subsidise other things, especially the agriculture sector more. Even in Europe, they spend close to €100bn annually to support agriculture.”
Additionally, it's critical that the government acknowledges the existence of market failure. Everything cannot be fixed by the market. A group of economists should be assembled by the government to investigate and pinpoint instances of market failure, he said.
Additionally, Adewale-Smatt Oyerinde, the Director-General of the Nigeria Employers' Consultative Association, stated that "the government must ensure that its interventions are handled with the highest level of integrity in order to effectively tackle the harsh economic conditions facing the country."
He emphasised the need for clear and open rules because many businesses were having difficulty in the face of persistent economic difficulties.
In the meanwhile, he called on decision-makers to create plans that support long-term economic stability in addition to addressing current problems.
"Without a dedication to openness and efficient resource management, the impact of these interventions will remain minimal,” he warned.
More so, a financial and IT consultant, Mr Adebukola Adetutu, urged the government to concentrate its efforts on implementing the right policies that will lift Nigerians out of poverty instead of spending billions of Naira on palliatives.
"Rather than depending only on short-term relief measures, it is imperative to create sustainable economic opportunities that empower citizens."
In addition to addressing the underlying causes of poverty, long-term remedies will foster stability and economic progress. The government can genuinely improve the lives of Nigerians by making investments in infrastructure, education, and job development, Adetutu continued.