NESG: Nigeria requires targeted reforms to stimulate economic recovery

The Nigerian Economic Summit Group (NESG) believes that sustained and targeted reforms in high-growth sectors are crucial for stimulating economic recovery and increasing investment inflows in Nigeria. The Chairman of the Group, Olaniyi Yusuf, recently shared insights on the NESG's position on the recent reforms and outlined key recommendations for sustainable development during an interview with CNBC Africa. The NESG expressed satisfaction with the government's recent efforts to harmonize foreign exchange rates and remove fuel subsidies, stating that these actions have been long-awaited critical steps to enhance the macroeconomic environment. However, the Group urged the government to further target high-growth sectors to drive economic growth. Yusuf highlighted the importance of formalizing the economy, particularly in sectors like trade and agriculture, which currently employ millions of Nigerians informally. He emphasized the need to increase oil and gas production while addressing security challenges to stabilize the foreign exchange market. Enhancing food security through improved agriculture was also identified as a key factor in reducing inflation. Additionally, Yusuf addressed the significance of domestic revenue mobilization, commending the government's tax reforms aimed at widening the tax base and increasing revenue generation. The NESG stressed the importance of reducing informality in the economy to ensure more people contribute to tax revenue. By digitizing and automating processes and enhancing linkages, the NESG believes that tax compliance can be improved and more revenue can be collected. When discussing foreign direct investment (FDI), Yusuf emphasized the need for policy consistency and efficiency in attracting investors. He highlighted Pakistan's approach of establishing a Special Investment Facilitation Council as a model for streamlining the investment process and ensuring investor certainty. Maintaining a stable macroeconomic environment and strengthening institutions were also cited as essential factors in boosting investor confidence. In light of the current economic challenges facing Nigeria, Yusuf underscored the importance of promoting a strong national vision, identity, and shared values to foster unity and a sense of belonging among citizens. The NESG is set to address these issues at the upcoming Nigerian Economic Summit, where national cohesion and unity will be a key focus. By aligning all stakeholders towards a common goal, the NESG believes that Nigeria can overcome its fractionalized state and achieve sustainable development. Overall, the NESG's recommendations center around targeted reforms in critical sectors, revenue mobilization, FDI promotion, and national unity as key drivers of economic recovery and growth in Nigeria.