The Nigeria Employers’ Consultative Association (NECA) has expressed concern that many businesses are yet to experience meaningful relief from the Federal Government’s economic reforms, despite signs of progress in the broader economy.
Speaking on the state of the economy, NECA Director-General Adewale-Smatt Oyerinde said recent policy changes have improved investor sentiment and strengthened confidence in the country’s economic direction. He noted that reforms in the fuel and foreign exchange sectors have demonstrated the government’s willingness to pursue market-based policies.
However, Oyerinde said the reality for many businesses remains challenging, with rising operating costs continuing to weigh heavily on companies across various sectors.
“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.
According to him, the weakened value of the naira has increased the cost of raw materials and production, making it harder for local manufacturers to compete effectively. He added that low consumer purchasing power has further reduced demand for goods and services.
While acknowledging recent gains in domestic refining, housing development and industrial projects, Oyerinde said these improvements have not been enough to offset the difficulties facing businesses.
He identified unreliable electricity supply as one of the biggest obstacles to growth and productivity.
“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.
The NECA chief noted that many companies still depend on generators and other alternative energy sources, significantly increasing their operational expenses.
He further observed that although government revenue and foreign reserves have shown improvement, businesses have not yet felt corresponding benefits.
“Inflation, high energy costs, multiple taxation, logistics challenges and weak consumer spending continue to constrain productivity and limit business expansion,” he said.
Oyerinde also explained that employers are taking a cautious approach to recruitment due to expensive credit facilities, foreign exchange uncertainties and mounting business costs.
He urged the government to intensify efforts aimed at improving power supply, ensuring exchange-rate stability and simplifying the tax regime. He also stressed the need for greater investment in skills development to prepare workers for emerging opportunities.
Despite the current challenges, Oyerinde expressed hope that businesses would eventually reap the rewards of the reforms if key structural issues affecting the economy are effectively addressed.
