NECA Highlights Unmet Business Potential Amid Economic Reforms
The Employers Consultative Association of Nigeria (NECA) asserts that businesses nationwide are yet to fully capitalize on the anticipated advantages stemming from the federal government’s ongoing economic reforms.
Government’s Commitment to Market-Driven Policies Recognized
In a recent interview with the News Agency of Nigeria, NECA’s Director-General, Adewale Smut Oyelinde, assessed the economic performance under his leadership. He acknowledged the significant strides made by the government, particularly the removal of fuel subsidies and the liberalization of the foreign exchange market, which he views as indicative of a genuine commitment to market-driven economic policies and enhanced transparency across various sectors.
Mixed Results in Investor Confidence and Operational Challenges
Oyerinde noted that while there are indications of improving investor confidence, many domestic enterprises, especially micro, small, and medium-sized enterprises (MSMEs), continue to face substantial operational hurdles. The depreciation of the naira has led to soaring production costs, diminished competitiveness, and heightened operational risks for numerous companies.
Inflation and Energy Costs Pressuring Business Operations
“Many private sector entities are still grappling with inflation, soaring energy costs, and fluctuating exchange rates, leaving them unable to realize the benefits associated with the expected reforms,” he stated. The combination of weakened consumer purchasing power and rising production costs is forcing many businesses to rethink their investment strategies and operational plans.
Infrastructure Development’s Role in Fuel Supply
Regarding infrastructure and refining, Oyelinde highlighted that advancements in housing, industrial investment, and local oil refining have contributed positively to fuel availability. However, he underscored that erratic electricity supply stands as a critical challenge for businesses, attributing it to ongoing grid instability and dependence on alternative energy sources. “Despite ongoing reforms in the power sector, electricity shortages remain a significant barrier to business productivity and competitiveness nationwide,” he remarked.
Broader Economic Indicators Fail to Reflect Corporate Gains
Oyerinde pointed out that while certain macroeconomic indicators, such as foreign exchange reserves and government revenue, have shown improvement, these gains have yet to permeate corporate management or enhance household welfare. “Inflation, elevated energy expenses, excessive taxation, logistical challenges, and weak consumer demand continue to stifle productivity and hinder business expansion,” he added.
Urgent Need for Structural Reforms and Investment
NECA’s Director-General indicated that employers remain wary of extensive hiring due to high borrowing costs, currency volatility, and escalating operational expenses. He emphasized that sustainable job creation hinges on implementing deeper structural reforms to curtail the cost of doing business and improve access to affordable financing. Oyelinde urged government prioritization of stable electricity supplies, reduced energy costs, streamlined tax systems, coherent policy frameworks, and exchange rate stability as essential measures for economic recovery and bolstering investor confidence.
Strategies for Strengthening Workforce and Local Manufacturing
Oyerinde also called for increased investment in technical and vocational education, digital skills enhancement, and the strengthening of public-private partnerships to elevate workforce readiness and foster business growth. He advocated for robust support for local manufacturing initiatives, including the promotion of “Made in Nigeria” products, infrastructure improvements, and enhanced security in critical business and investment pathways. He expressed optimism that sustained reforms, coupled with targeted interventions, will enable businesses to unlock extensive benefits that drive growth, create employment opportunities, and promote long-term economic stability.
