The Centre for the Promotion of Private Enterprise (CPPE) has welcomed the positive assessment of Nigeria’s economic reforms contained in the latest IMF Article IV Consultation Report, describing the Fund’s diagnosis of recent macroeconomic developments as largely consistent with the realities acknowledged by many stakeholders within the Nigerian private sector.
According to the CPPE, recent reforms have yielded significant gains in restoring macroeconomic stability, including improved foreign exchange market liquidity, stronger external balances, enhanced investor confidence, increased foreign reserves and improved performance of listed companies.
Commenting on the report, the Chief Executive Officer of CPPE, Dr. Muda Yusuf, noted that the moderation in exchange rate volatility, recovery in capital inflows and improved policy credibility demonstrate that Nigeria is gradually moving away from a period of severe macroeconomic distortions toward a more predictable economic environment.
“These achievements are important milestones. A stable macroeconomic environment provides the foundation for investment, productivity growth and long-term economic development,” Yusuf said.
However, the CPPE stressed that macroeconomic stability alone is insufficient if it does not translate into tangible improvements in the welfare of citizens.
The Centre agreed with the IMF’s concerns regarding persistent poverty and food insecurity, emphasizing that the ultimate measure of economic reforms lies in their ability to improve living standards, create jobs, increase incomes and reduce the cost of living.
“The next phase of economic management must focus on converting macroeconomic gains into welfare gains. Economic reforms should not only stabilize markets but also improve the quality of life of ordinary Nigerians,” the Centre stated.
Concerns Over Prolonged Monetary Tightening
While acknowledging the role of monetary tightening in moderating inflationary pressures and stabilizing the exchange rate, CPPE expressed concerns about the continued reliance on high interest rates as a policy tool.
The Centre warned that elevated borrowing costs are increasingly constraining investment, business expansion and job creation, while also increasing the cost of government debt servicing.
According to CPPE, lending rates in Nigeria remain among the highest globally, making access to affordable finance difficult for productive sectors of the economy. The Centre further noted that high yields on government securities are encouraging investors to channel resources into treasury instruments rather than supporting enterprise development and industrial growth.
“An economy cannot achieve sustainable development when financial capital earns higher returns from government securities than from investments in productive activities, innovation and industrialization,” Yusuf observed.
Development Finance Remains Critical
CPPE also urged policymakers and development partners to recognize the strategic role of development finance in addressing structural financing gaps within the Nigerian economy.
The Centre argued that sectors such as agriculture, manufacturing, housing and infrastructure require long-term financing that conventional commercial banking systems are often unable to provide.
“Development finance is not a market distortion. It is often a necessary response to market failure. Economic transformation in both developed and emerging economies has historically relied on targeted financing interventions to support strategic sectors,” the statement noted.
The Centre maintained that a purely market-driven financing framework would be insufficient to unlock the investment needed to drive industrialization, food security and inclusive economic growth.
Rising Debt Service Costs Require Attention
CPPE further highlighted the growing fiscal implications of prolonged high interest rates, noting that elevated domestic borrowing costs have significantly increased government debt-service obligations.
The Centre warned that rising debt-service commitments are reducing fiscal space for investments in critical sectors such as infrastructure, healthcare and education.
It therefore welcomed recent indications by the Minister of Finance regarding plans to refinance portions of the government’s debt portfolio to lower financing costs and improve fiscal sustainability.
Portfolio Flows Cannot Substitute for Productive Investment
The Centre also echoed the IMF’s concerns regarding Nigeria’s increasing dependence on foreign portfolio investments.
While acknowledging the role of portfolio inflows in supporting liquidity and exchange rate stability, CPPE cautioned that such investments remain highly sensitive to global economic and geopolitical developments.
According to the Centre, sustainable economic resilience requires stronger export performance, increased foreign direct investment, enhanced productivity and a more competitive domestic economy.
“Portfolio flows may provide short-term stability, but long-term economic transformation depends on productive investments that create jobs, build industries and expand productive capacity,” the statement added.
Beyond Cash Transfers: A Call for Economic Inclusion
CPPE advocated a broader approach to social protection beyond conditional cash transfers, arguing that long-term poverty reduction is best achieved through investments that directly reduce the cost of living and expand economic opportunities.
The Centre called for increased public investment in agriculture, transportation infrastructure, healthcare, education, water supply and rural development, noting that such investments generate lasting economic value while improving citizens’ welfare.
“The most effective poverty reduction strategy is one that lowers the cost of living while creating opportunities for sustainable income generation,” Yusuf said.
States Must Play a Greater Role
CPPE also observed that the IMF report did not sufficiently recognize the increasingly important role of sub-national governments in driving economic transformation.
Following improvements in federation revenue allocations, state governments now possess greater fiscal capacity to address development challenges in areas such as agriculture, rural infrastructure, basic education, primary healthcare and local security.
The Centre stressed that meaningful economic reform and inclusive growth cannot be achieved through federal government action alone.
“Many of Nigeria’s most pressing development challenges fall within the purview of state governments. Any serious strategy for economic transformation must therefore incorporate the role of sub-national governments,” the statement noted.
Shared Prosperity Must Define the Next Phase of Reform
While commending the IMF’s recognition of the progress achieved through recent reforms, CPPE emphasized that the next phase of Nigeria’s economic journey must focus on ensuring that macroeconomic stability translates into inclusive prosperity.
According to the Centre, restoring stability is only the first step; delivering broad-based economic opportunities, reducing poverty and improving living standards should now become the central objective of economic policy.
“Macroeconomic stability may rescue an economy from crisis, but shared prosperity is what sustains public confidence in reform. That should be the defining goal of Nigeria’s next phase of economic transformation,” the statement concluded.
