'Economy showing signs of recovery' - Experts

Economic and finance experts have on Sunday, May 26, 2024 examined the scorecards of the Bola Tinubu administration, with many of the view that the government has laid the foundation for economic rebound.

According to some of these economic experts, although there were challenges with the government's economic reforms, the macroeconomic changes initiated by the government were extremely necessary.

They added that economic reforms for long-term sustainable economic growth, like the one promised by Tinubu, take time to fully materialise, calling for patience and support from Nigerians.

Experts who spoke included Managing Director, Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf; Managing Director, Arthur Steven Asset Management, Mr. Olatunde Amolegbe; Managing Director, APT Securities and Funds, Mallam Garba Kurfi; Managing Director, AIICO Capital, Mr. Femi Ademola and Managing Director, HighCap Securities, Mr David Adonri among others.

Yusuf said the performance review of one year of the current administration requires proper contextualisation as there were significant legacy issues which posed serious challenges, especially from a macroeconomic point of view.

Yusuf stated: “The truth is that reforms take time to be conceptualised and executed. It could take even longer time for the results to be felt. But my view is that the reforms were necessary to pull back the economy from the brink.

“Much has been achieved with fiscal consolidation. Government revenue had improved significantly following the reforms. There was also the tax reform initiatives.

“The point to stress is that much of the first year was devoted to corrective reforms which were in many instances also painful. But the reforms were inevitable because you can’t build something on nothing. Fixing the economic fundamentals were crucial for economic sustainability.”

He, however, noted that the government has not shown enough agility in terms of the speed of delivering mitigating measures to ease the pains of the reforms.

“There is also need to address the volatility in the foreign exchange market. Frequent swings in the exchange rate is very detrimental to business because of the uncertainty that comes with it.

“The CBN should also address the frequent changes in exchange rate for import duty computation. This rate should actually be fixed at N1,000 per dollar or even less to subdue current inflationary pressures.”

Amolegbe, a former president of Chartered Institute of Stockbrokers (CIS), also opined that FG’s reforms were well intended and necessary to restore the economy to the path of growth.

He said: “To my mind, the first duty of any new government is to steady the ship of state by ensuring a rancour-free transition and continuity in desirable policies while stating clearly its own policy objectives and rallying the populace to support same. This isn’t always as easy as it sounds as our recent history has shown. So, in this regard, I will score the administration quite high.

“Also, political leadership always entails keeping an eye on the next election and taking actions that are popular with the electorate. This sometimes means kicking the can down the road regarding taking tough economic policies decisions. This administration has shown guts in bulking this trend and focusing on policies that are in the long term interest of this country economically, rather than what is politically expedient at this time. For this, I also give them kudos.”

Ademola said one year was a short period to appraise the government but many of the reforms were in the right direction.

According to him, while economic indicators are not at the right places now with high inflation, interest and forex rates, the government should be commended for keeping the country standing.

“If we check economic fundamentals which may not be visible to the public, the government should be commended for keeping the country standing. The economic reforms-the removal fuel subsidy and foreign exchange subsidies, were in the right direction to strengthen the economy and allow the country to continue as a going concern.

“The government appears to have started well with road infrastructure as can been in the Federal Capital Territory (FCT) and some other states. However, they have not really done anything in one of the most priority sectors of the economy, power,” Ademola said.