Chief Executive Officer of the Centre for the Promotion of Private Enterprises (CPPE), Dr Muda Yusuf has said that, Nigeria can achieve GDP growth of between 4 and 4.5 per cent in 2026 if economic reforms are sustained, budget assumptions are made more realistic and structural bottlenecks limiting productivity are addressed.
In an interview with ARISE NEWS on Tuesday, Yusuf said while macroeconomic indicators are gradually stabilising, downside risks such as oil price volatility, geopolitical tensions, security challenges and controversial tax reforms could undermine growth projections if not carefully managed.
“Yes, many of us have projected very positive outlook. But just as you said, oil price volatility is essentially a risk. And that is where we advise the National Assembly, when they are considering the budgets, they need to revise or review some of those assumptions. Particularly assumptions around oil price and oil output. Because as we speak, those assumptions are really on the optimistic side.”
Yusuf warned that unrealistic revenue and production assumptions have historically weakened budget implementation, stressing that greater caution would improve planning and execution. “The more causality you have about those assumptions, particularly revenue assumptions, the better for planning and the better for the realisation of the budgets. So, I’m hoping that this year those assumptions will be taken care of and made a lot more realistic. Of course, we have these geopolitical issues around Venezuela and all of that.”
He noted that while geopolitical developments, including tensions around Venezuela, could affect crude oil markets, the short-term impact may be limited given Venezuela’s already weak oil output. “Those two have implications for oil price, just as you have said. Although given the fact that up until now, the oil price, I mean, Venezuela has not been performing so well in the oil market. The output has been low, investment has been low. They have been suffering all manner of sanctions and all of that. So, what is happening may not materially affect the oil market, at least in the short term.”
He also pointed to implementation challenges surrounding recent tax reforms, saying that while the law must be obeyed, authorities must act pragmatically to calm anxieties in the economy. “Some of the controversies around gizzarding and all of that, I think those ones are beginning to fizzle out. But implementation has to be as pragmatic as it can be, so that all the anxiety around this will not create another major problem for the economy.”
On jobless growth, Yusuf said strong GDP numbers alone do not translate into improved welfare, arguing that employment creation is driven primarily by investment and productivity, not macroeconomic stability alone. “Job creation is about investment. And investment is about the quality of the investment environment. Key enablers, We have the macroeconomic factors, which we have all discussed briefly in terms of stability, that is one leg of it. The other leg of it are factors that impact on competitiveness, productivity and sustainability of investments. Macroeconomic conditions are good, but you have structural issues that can enable productivity. Because if you have a good macroeconomic environment, and you are grappling with productivity issues, it will be very difficult for those who are investing to be able to sustain their investment. It will be very difficult for new investors to come and work. Because it is through investment that you can create the jobs, Some of these require specific policy intervention measures outside the macroeconomic conversations. To be talking about NIG, talking about power, talking about regulation, talking about how supportive our institutions, our state institutions, are they facilitating businesses? Or they are facilitating businesses? Some of them constitute obstacles to business.
If we really want the goods to translate into jobs, it’s also about welfare, there has to be deliberate measures at the state level, at the federal level, even at the local government level, to ensure that we address those obstacles to productivity in the economy.”
Yusuf identified agriculture, construction, trade, ICT, entertainment and tourism as job-elastic sectors capable of driving growth and employment if supported by the right mix of fiscal, monetary and trade policies. “If you take trading for instance, a lot of jobs are taking place. If you take ICT, if you take e-commerce, if you take the entertainment industry, you know, tourism, I mean, a lot is happening in the entertainment industry. And of course, you also have agriculture. These are sectors that employ a lot of people.
These are job-elastic sectors, So what I think is important as part of the employment or job creation strategy is to identify those critical sectors that are job-elastic. Because when they grow, they deliver more jobs. If construction is going, construction will deliver jobs. Imagine how much labour we need, the same thing with agriculture. The same thing even with ICT. The same thing even with the distributive trade sector.
The distributive trade sector is a very large sector. By virtue of the fact that we have a large population. So I think in terms of the sector that can deliver growth, it’s about agriculture, it’s about manufacturing, it’s about workforce. It’s about trade. But just as I said, we need a combination of policy instruments, trade policy, fiscal policy, monetary policy, to be able to ensure that we support all these prospects in all these areas. Because if there is no prosperity for those who are investing, if there is no prospects for them to prosper, they will not put their capital there. It is the practice that creates the jobs, not the government. It is a function of the environment, it’s a function of a combination of policy instruments to support those initiatives of entrepreneurs in the economy.”
He also called for deep regulatory and public sector reforms, warning that a transactional mindset within regulatory agencies continues to frustrate investors. “The regulatory environment is a major factor in the investment environment. Because regulators can sometimes be a major impediment to investments, Getting the regulatory environment right is extremely, very, very important. It’s a function of the quality of people that are on the board. It’s a function of the quality of people that are in the management.
And it’s a question of the commitment of those in the regulatory space to actually promoting the economy good and looking out for the larger good for the society. One challenge we have had with many public sector institutions is that many of them have become highly transactional.
Transactional in terms of looking out for what exactly we benefit them, Some of this may not even be happening at the level of the head of those institutions. But if you talk to the private sector players that interact with some of them, this can be a very, very frustrating experience, So, as part of the reform, yes, we are talking about macroeconomic reform and all of that.
We should also be talking about regulatory reform. We should be talking about public sector reform. So that you have a public sector that is also in alignment with what you want to achieve as an economy.”
Erizia Rubyjeana
Follow us on:
