Nigeria: Economic Reforms Yet to Fully Impact Businesses, Says Neca

The Nigeria Employers' Consultative Association (NECA) says businesses across the country are yet to fully experience the expected benefits of the Federal Government's ongoing economic reforms.

Mr Adewale-Smatt Oyerinde, Director-General of NECA, said this in an interview with Newsmen on Sunday in Abuja while assessing the administration's economic performance.

Oyerinde acknowledged that the removal of fuel subsidy and liberalisation of the foreign exchange market reflected government's commitment to market-driven economic policies and improved transparency across sectors.

According to him, while there are indications of improved investor confidence, many domestic businesses, particularly Micro, Small and Medium Enterprises (MSMEs), continue to contend with operational challenges.

He said depreciation of the naira had increased production costs, affected competitiveness and heightened operational risks for many businesses.

"Many private sector operators are yet to experience the anticipated gains of the reforms as they continue to grapple with inflation, energy costs and exchange rate volatility," he said.

Oyerinde said declining consumer purchasing power and increasing production expenses had placed pressure on businesses, with some firms adjusting investment plans and operations in response to prevailing economic conditions.

On infrastructure and refining, Oyerinde said developments in housing, industrial investments and local petroleum refining had created opportunities and contributed to improved fuel supply.

He, however, identified power supply as a major challenge facing businesses, citing persistent grid instability and reliance on alternative energy sources.

"In spite of the ongoing reforms in the power sector, insufficient electricity supply remains the number one constraint to business productivity and competitiveness across the country," he said.

Oyerinde said that although some macroeconomic indicators, including foreign reserves and government revenues, had shown improvement, the gains were yet to be broadly reflected in business operations and household welfare.

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"Inflation, high energy costs, multiple taxation, logistics challenges and weak consumer spending continue to constrain productivity and limit business expansion," he said.

The NECA director-general said employers remained cautious about large-scale