NESG: Timely Reforms Will Stabilise Nigeria’s Economy

According to Tayo Aduloju, the chief executive officer of the Nigerian Economic Summit Group (NESG), there is a need for well-sequenced and timely economic reforms to stabilise Nigeria’s economic landscape.

Mr Aduloju made this known during an interactive session with newsmen in Lagos.

Mr Aduloju stressed that even beneficial reforms could have adverse effects if not properly sequenced.

The challenge with explaining that is what is a well-bundled set of well-sequenced and timed reforms?

“We think that the best reforms in this world, if you do not sequence them properly, can be devastating,” he stated.

He highlighted the impact of recent macroeconomic reforms, such as foreign exchange (FX) and Petroleum Motor Spirit (PMS) price adjustments, on businesses in the first quarter of this year.

He explained that these adjustments had resulted in increased costs across various aspects, including raw materials, logistics, working capital, and inventory, as outlined in NESG’s report on pass-through risks.

The NESG CEO noted how the internalisation of inflation within business models was influencing decisions that could lead to reduced asset utilisation and a contraction in GDP.

According to him, the current economic environment, characterised by higher credit costs and elevated business risks, has compelled companies to streamline their operations to navigate these challenges.

This, he noted, could signal a contraction in the gross domestic product (GDP).

Mr Aduloju expressed cautious optimism regarding Nigeria’s economic trajectory, emphasising the need for comprehensive reforms and enhanced coordination among all stakeholders to achieve sustainable growth.

He said that the upcoming 30th Nigerian Economic Summit by NESG, scheduled for October, would be instrumental in reflecting on past economic strategies and charting a new course towards long-term economic stability and growth.

The summit aims to facilitate discussions among government, private sector, and civil society stakeholders to develop a consensus on the economic model necessary to propel Nigeria’s transformation over the next three decades.

“We cannot afford not to do it in a way that absorbs people into productive work. We can’t afford it. And so what pivots will we make?

“That’s the essence of the 30th anniversary. A reflection, and a forward-thinking on big consensus, especially political consensus on the economic model,” Mr Aduloju said.