The Centre for The Promotion of Private Enterprise (CPPE) has tasked the federal government to focus on converting macroeconomic gains to welfare benefits, noting that true tests of reform should be seen in lower food prices, better jobs, improved incomes and enhanced living standards.

 

The Centre made the call, while reacting to the International Monetary Fund (IMF) Article IV Report on Nigeria,  through its Chief Executive Officer, Dr. Muda Yusuf, on Sunday.

 

CPPE stated that while it agreed with IMF’s  position that the  present government’s reforms had helped  stabilise the foreign exchange market and improve external sector balances, it also  shared the Fund’s concerns about the  persistence of poverty and food insecurity despite the progress made on macroeconomic stabilization.

 

It, therefore, insisted that economic reforms  would ultimately be judged, not only by their impact on macroeconomic  indicators, but their ability to improve the welfare of citizens.

 

“Exchange rate stability, reserve accumulation and fiscal consolidation are important. But, the  true test of reform is whether they translate into lower food prices, better jobs, improved incomes and enhanced living standards,” it argued.

 

The Centre, therefore, argued that the challenge before  policymakers should  no longer be merely  on economic stabilization; but that of inclusive prosperity.

 

On monetary tightening, the organsiation also expressed concerns on the  Fund’s continued  emphasis on monetary tightening, without  sufficient  consideration  of the adverse consequences for investment, enterprise growth, job creation and sovereign debt service pressures.

 

“The current monetary policy stance has delivered some benefits in terms of inflation moderation and exchange rate stability. However, every policy instrument has a point of diminishing returns. Beyond that point, the costs may begin to outweigh the benefits.

 

“The cost of credit in Nigeria has reached levels that are becoming increasingly prohibitive for productive investment. Lending rates remain among the highest in the world, making it difficult for businesses to expand, invest or create jobs,” it stated.

 

The Centre also stated that high yields on government securities had also intensified the crowding-out effect in the nation’s  financial system; with banks and investors, it added, increasingly channeling resources into treasury bills and government bonds, rather than financing productive sectors of the economy.

 

The organization expressed the fear that the economy may not achieve sustainable development,  when financial capital continues to earn higher returns from government financial instruments, than from supporting enterprise, innovation and industrialization.