Nigeria’s bold economic reforms have succeeded in pulling the country back from the brink of a macroeconomic crisis, but the benefits have yet to reach millions of households grappling with high living costs, according to the Centre for the Promotion of Private Enterprise (CPPE).
Assessing the first three years of President Bola Tinubu’s administration, the private sector think tank said the government inherited an economy burdened by severe foreign exchange shortages, unsustainable fiscal practices, widespread market distortions and weakening investor confidence.
According to the CPPE, the administration’s decision to remove fuel subsidies and unify exchange rates represented the most significant economic reforms undertaken in decades, helping to restore macroeconomic stability after years of mounting vulnerabilities.
“When the administration took office, the economy was approaching a tipping point as the fiscal, monetary and structural foundations of the prevailing model became increasingly unsustainable,” said Muda Yusuf, chief executive officer of CPPE.
The organization noted that the foreign exchange market at the time was characterized by acute illiquidity, multiple exchange rates and extensive arbitrage opportunities that undermined transparency and discouraged investment.
Fiscal conditions were equally fragile. Ways and Means financing had become deeply entrenched, effectively allowing monetary financing of government deficits, while the fuel subsidy regime had evolved into a major source of fiscal leakage, corruption and economic distortions.
In response, the government embarked on a reform agenda centered on fuel subsidy removal and exchange-rate liberalisation.
According to the CPPE, eliminating the fuel subsidy halted a major drain on public finances, reduced opportunities
This post was originally published on this site.
