Investors Affected By Nigeria’s Macroeconomic Management Framework – Muda Yusuf

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Dr. Muda Yusuf, the Founder/CEO, of the Centre for the Promotion of Private Enterprise, (CPPE) has said that Nigeria’s macroeconomic management framework has continued to pose serious challenges to investors in the economy.

He said this on Saturday in a statement titled “CPPE COMMENTS ON NIGERIAN ECONOMY AT 62”

According to Dr. Yusuf, the situation has been further compounded by the shocks and disruptions inflicted by the Russian invasion of Ukraine and the lingering effects of the covid-19 pandemic.

He further said “The fragile macroeconomic conditions remain a major cause for concern. The troubling macroeconomic situation has manifested in the following ways in recent years: weak and depreciating currency, high inflationary pressure, high and rising debt profile, exchange rate volatility, liquidity crisis in the foreign exchange market, increasing fiscal deficit, growing debt service burden, and the acceleration of money supply following the rising CBN financing of the deficit.

Investors Affected By Nigeria’s Macroeconomic Management Framework – Muda Yusuf

He noted that there are profound concerns around investment climate issues.

He stated that high infrastructure deficit, cargo clearing challenges, which have continued to worsen, high transactions cost at the ports, weak productivity in the real sector largely as a result of infrastructure conditions, regulatory challenges and policy inconsistency are contributory factors to poor economic performance.

“Persistent importation of petroleum products had continued to put pressure on foreign reserves and weaken the capacity of the CBN to support the forex market. Petroleum refineries have remained non-performing over the years.

“The fiscal position of the federal government and the states are very weak, characterized by high fiscal deficit, high and increasing debt profile and the associated debt service burden is a cause for concern.

“The state of insecurity continues to take its toll on the economy, especially on agricultural output and fueling food inflation. It is also impacting the confidence of investors. The spate of oil theft and the associated leakages of government revenue are very troubling. Billions of dollars have been lost to this apparent failure of security effectiveness in the oil-producing areas.

Speaking on the way forward, he said, “There is a need for urgent steps to be taken to ensure a better macroeconomic management framework to stabilize the exchange rate, eradicate the challenge of illiquidity in the foreign exchange market, and stem the current depreciation of the naira.

Source: Nairametrics