The federal government has been urged to urgently deploy measures to ease the current headwinds inflicted by the current reforms.
The chief executive officer, Centre for the Promotion of Private Enterprise, Dr. Muda Yusuf, in his mid-year economic review released on Sunday, noted that the measures should be a mix of direct interventions which include tax incentives for low-income employees and small businesses, reduction in import duty on some critical intermediate products for key sectors of the economy, import duty concessions for the transportation, health, power and energy sectors.
“There is an urgent need to address the social outcomes of the recent reforms, especially the inflationary pressure induced by the fuel subsidy removal. Urgent measures need to be put in place to mitigate the soaring cost of living and the escalating operating and production costs, especially for businesses”.
ENERGY TIMES reports that the improved fiscal space created by the reforms should make these mitigating measures feasible and they have to be implemented urgently in order to give the current reforms a human face.
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Yusuf noted that inflationary pressures may intensify in the near term, the exchange rate may come under pressure in the short term as forex demand backlog exerts pressure on the official forex window, the pressure is expected to ease before the end of the year. “This would pave way for an equilibrium exchange rate which would be more tolerable and sustainable. Meanwhile the CBN should put in place a sustainable intervention framework to moderate the volatility in the forex market”.
He noted that with a better fiscal space, the outlook for lower fiscal deficit, moderation in the growth of public debt, reduction in debt service burden, and an improvement in the macroeconomic stability are very positive.
“All of these would impact economic growth prospects in the second half of the year”, he stated
