Dr. Muda Yusuf, the Director/CEO of CPPE, emphasizes the need for the administration of Bola Tinubu to promptly deploy these mitigating measures. He stresses that such interventions should include tax incentives for low-income employees and small businesses, import duty reductions on critical intermediate products, and duty concessions for key sectors such as transportation, health, power, and energy. These measures, made feasible by the improved fiscal space created through reforms, must be implemented urgently to ensure a human-centered approach to the current reforms.
Yusuf also addresses the potential intensification of inflationary pressures and short-term pressures on the country’s exchange rate due to a backlog of forex demand. However, he anticipates that these pressures will ease by the end of the year, paving the way for a more tolerable and sustainable equilibrium exchange rate. To achieve this, he calls for the establishment of a sustainable intervention framework by the Central Bank of Nigeria to moderate forex market volatility.
Looking ahead, Yusuf expresses optimism about the outlook for the economy in the second half of the year. He highlights the potential for lower fiscal deficits, a moderation in the growth of public debt, reduced debt service burdens, and improved macroeconomic stability, all of which will positively impact economic growth prospects.
Yusuf acknowledges that the Nigerian economy has faced various challenges, including the ongoing Russian-Ukraine war, monetary tightening in advanced economies, and geopolitical tensions. Domestically, factors such as the naira redesign policy, dysfunctional foreign exchange policies, political transition processes, weak oil production recovery, and the challenge of insecurity in certain areas have hindered economic growth.