The Policy and Governance Discussion Platform (PGDP), a policy think tank, has highlighted ways through which the federal government can further boost the economy within the shortest period.
PGDP made its key recommendations known in its second quarter report for 2024 seen by BusinessDay on Thursday.
It stated that the government needs to maintain stability in the foreign exchange market and tame the skyrocketing inflation to attract investors and ease business activities.
Nigeria is currently facing record-high inflationary levels as prices rose to 34.19 per cent, with food prices soaring to 40.87 per cent.
The rise in prices of food and essential commodities is weakening purchasing power, making consumers spend more while reducing business patronage.
“Control inflation through measures like managing interest rates, supporting security and food production as well as reducing import bills by making available alternatives,” the PGDP recommended.
It said the government needs to stimulate local production and value addition, stressing that this will reduce reliance on imports and stabilise prices.
The group also noted that in luring in foreign direct investment (FDI) and much-needed FX, the government needs to implement reforms that would improve the ease of doing business and ensure adherence to transparent and predictable rules and procedures.
It however added that attracting FDIs requires a stable exchange rate. According to the National Bureau of Statistics, direct investment into Nigeria decreased by 35.22 per cent to $119.18 million in the first three months of 2024 up from $183.97 million in the previous quarter.
Nigeria’s FX market has remained relatively stable in recent times as the naira has been within the 1,500-1,600/$ range, demonstrating the central bank’s efforts to restore confidence in the market.
“Develop long-term strategies to boost exports, attract FDI, and stabilize exchange rates,” the policy group said in its report.
It also tasked the government to support businesses with policies and interventions that will improve their growth and profitability as this will boost the economic development needed.
“Offer targeted incentives and support to attract and retain local and multinational companies, emphasising the potential for long-term growth and profitability in the Nigerian market,” it said.
The think-tank recommended that the government should prioritise debt reduction as this will reduce fiscal imbalance, stabilise exchange rates, and signal fiscal responsibility to investors to attract investment.
Nigeria’s public debt stock rose by N24.33 trillion in the first three months of 2024 to N121.67 trillion from N97.34 trillion as of December 2023. However, the government’s revenue is still not enough to halt borrowings, suggesting more debt profile.
The PGDP also tasked the government to “collaborate with relevant stakeholders to seek ways to mitigate the impact of electricity tariffs on businesses and consumers” as part of the measures to promote the ease of doing business.
The group, acknowledging the impact of agriculture on economic growth, recommended an increase in funding and support for agriculture, manufacturing, infrastructure development and their linkages.
It said, “consolidate and streamline agricultural research institutes to reduce redundancy and invest in agriculture and local industries to boost domestic production”.
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