The Centre for the Promotion of Private Enterprise (CPPE), one of the leading organized private sector advocacy groups in Nigeria, has advocated some policy options the Federal Government should urgently explore to combat the growing constraints hampering business operations and improved performance of the nation’s economy.
A statement issued by the Director/CEO of the group, Dr. Muda Yusuf, contained the position of the Centre shortly after the National Bureau of Statistics (NBS) reported an upward swing in the nation’s inflation rate to 24.08% in July, up from the 22.79% rate recorded in June.
According to him, to frontally tackle the challenges bedeviling the supply side of the economy which is imperative to boost production, stabilize the Naira exchange rate, secure the politico-economic space, and accelerate efforts to ensure domestic refining of fuel, the remedial measures must be multi-pronged and speedily implemented.
The CPPE boss, a pointed out that surging inflation over the months had been impacting negatively on citizens’ welfare and small businesses, stated that some of the factors spurring the surge in inflation, as it is currently observable globally but more particularly in Nigeria include the depreciating Naira FX rate, rising energy prices and transportation costs, FX market illiquidity, insecurity in many farming communities, and structural bottlenecks impeding productivity.
Clarifying further the stance of the group on the inflationary pressures now rapidly weakening the real incomes and purchasing power of citizens and thereby aggravating poverty incidence and escalating production costs with the attendant negative impact on businesses profitability, Yusuf noted that the ugly situation had been causing erosion of shareholder value in many businesses, weakening investors’ confidence, and huge drop in manufacturing capacity utilization, amongst others
He pointed out that reverse these constraints; the government must urgently adopt measures to moderate inflation by addressing the challenges bedevilling the supply side of the economy.
On the way forward, the seasoned economist advocated: “It is imperative to urgently fix production and productivity constraints, stabilize the exchange rate by ensuring liquidity in the forex market, tackle insecurity, accelerate efforts to ensure domestic refining of petroleum products, and fast-tracking tax and fiscal reforms to curb escalating deficit spending.”
Yusuf also urged the Federal Government to give producers and citizens some relief by reviewing tariff policies by granting concessionary import duty on intermediate products for industrialists, especially those involved in the food processing segments of the agriculture value chain.
