Nigeria at 66: CPPE says productivity must replace economic stabilisation

The Centre for the Promotion of Private Enterprise (CPPE) has called on the Federal Government and other tiers of government to shift economic policy from macroeconomic stabilisation towards productivity-led growth and shared prosperity as Nigeria marks its 66th independence anniversary.

In a statement titled “Nigeria at 66: From Economic Stabilisation to Shared Prosperity,” issued on Tuesday by its Chief Executive Officer, Dr Muda Yusuf, CPPE said Nigeria had made significant progress in diversifying its economy but had diversified what it produces more than what it exports.

The centre said the central challenge was now to increase the value generated per worker, reduce the cost of producing goods and services and translate economic gains into higher real incomes.

It noted that agriculture, telecommunications, banking, trade, construction, entertainment, digital services, cement, fertiliser and refining had expanded Nigeria’s productive capacity, but structural constraints continued to limit productivity.

CPPE says reforms built stronger foundation

CPPE said Nigeria’s economic history showed that credible reforms and open markets could generate significant private-sector investment, citing telecommunications liberalisation and banking and payments reforms as examples. However, it said oil dependence, inconsistent policies and inadequate infrastructure remained persistent weaknesses that had exposed the economy to external shocks.

The centre said fluctuations in oil prices had repeatedly affected government finances and foreign exchange supply, while recessions, insecurity, the COVID-19 pandemic and global food and energy shocks had exposed structural vulnerabilities.

It acknowledged the impact of petrol subsidy removal, foreign exchange reforms and revenue measures under the current administration, describing them as consequential decisions that addressed longstanding fiscal and foreign exchange distortions.

CPPE said stronger government revenues, foreign exchange reserves and exchange rate stability had provided a firmer foundation for the economy, but argued that these gains had not yet translated sufficiently into improved household welfare or lower operating costs for businesses.

Productivity must replace stabilisation focus

The centre said the moderation in inflation should not obscure the fact that prices remain substantially higher than previous levels. It noted that higher petrol prices, exchange rate adjustments and global food and energy shocks had weakened purchasing power, while businesses continued to face elevated input, distribution and financing costs.

• “This is why stabilisation must now give way to a determined productivity agenda,” CPPE said.

The organisation said farmers need security, irrigation, storage and access roads to raise output, while manufacturers require reliable electricity, efficient ports and predictable regulations.

It added that small businesses need affordable working capital and sufficient consumer demand to expand.

• “Without progress on these structural constraints, growth will remain too weak in jobs and real incomes, regardless of improvements in headline indicators,” the centre said.

CPPE urged the government to prioritise electricity supply, security along farming and commercial corridors, port efficiency, logistics, agricultural productivity, industrial competitiveness and enterprise-focused skills development. It also called for public support to industries to be linked to investment, efficiency and export performance.

Three government tiers must deliver

CPPE said the impact of economic reforms would ultimately be determined at the level where Nigerians live and businesses operate, making coordination among the three tiers of government important.

It said the Federal Government should sustain macroeconomic stability while focusing on national security, electricity and transport infrastructure, while state governments should improve land administration, roads, investment approvals, education and healthcare.

Local governments, it said, should maintain community infrastructure, provide basic services and eliminate arbitrary levies imposed on small businesses.

• “A federal highway cannot unlock agricultural production if state and local roads leave farms inaccessible,” CPPE said.

The centre cautioned that higher public revenue would have limited impact if healthcare facilities remained understaffed, schools lacked teachers and businesses continued to provide basic infrastructure such as electricity and water themselves.

The CPPE had previously warned that reversing Nigeria’s economic reforms would damage the economy and urged the government to shift its focus from macroeconomic stabilisation to productivity, jobs and improved living standards.

It also urged Nigerian banks to reduce lending rates following the Central Bank of Nigeria’s (CBN) 350-basis-point cut in the Monetary Policy Rate (MPR), saying the adjustment should translate into lower borrowing costs for businesses.