Shettima and Oyedele back policy changes, claim economic foundation is now more solid

The Federal Government defended its broad economic reforms on Monday, asserting that despite the painful consequences for businesses and households, these measures have successfully steered Nigeria away from fiscal distress and laid the groundwork for long-term growth.

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Vice President Kashim Shettima and Minister of Finance Taiwo Oyedele emphasized that the removal of fuel subsidy, foreign exchange reforms, and tax changes were essential to rescue the economy from years of structural distortions.

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The government acknowledged that businesses and ordinary Nigerians are still grappling with the burden of high inflation, elevated interest rates, and rising operating costs.

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At the fifth Nigeria Employers’ Summit in Abuja, themed “Leveraging Reforms and ESG for Enterprise Competitiveness and Inclusive National Growth,” Shettima stated that the current administration inherited an economy burdened by unsustainable subsidies, weak government revenues, and declining investor confidence.

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He noted that the easy option would have been to postpone difficult decisions, but leadership requires taking hard choices, and that economies that flourish today did not stumble into prosperity but instead summoned the foresight to imagine a different future and the courage to implement the necessary reforms.

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According to Shettima, the Renewed Hope Agenda was designed to confront longstanding distortions that had weakened the economy, and when President Bola Tinubu assumed office, the economy carried deep structural burdens, including a fiscally unsustainable fuel subsidy and a fragmented foreign exchange market.

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The Vice President said the administration could not continue to build prosperity on distortions or create jobs in an economy burdened by multiple taxation, poor logistics, and insecurity.

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Shettima defended the removal of fuel subsidy and the liberalisation of the foreign exchange market, describing both policies as central to economic recovery, as the subsidy crowded out investment and encouraged inefficiency and rent-seeking.

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The government’s tax reforms, he said, were designed to reduce the number of taxes, harmonise administration, and support small businesses, by lowering rates and widening the tax base needed to fund infrastructure.

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The VP added that the administration’s interventions in the power sector, gas development, and the Presidential Compressed Natural Gas Initiative were all targeted at reducing the energy burden on businesses and households.

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He urged the private sector to take advantage of the reforms and become a key driver of national development, as government designs policy, but businesses build the factories, farms, services, and innovations that create jobs and prosperity.

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On his part, Finance Minister Taiwo Oyedele acknowledged that the reforms had come with painful consequences but insisted that the economy was in a far better position than it was three years ago.

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Oyedele said the biggest obstacle facing the government’s reform agenda was widespread misunderstanding of policy measures and a growing trust deficit between citizens and government, and that although Nigerians have endured significant pain from the reforms, the country is already beginning to witness some positive outcomes.

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He maintained that the administration inherited an economy on the brink, with dwindling foreign exchange liquidity, mounting debt obligations, and limited fiscal space, stressing that the reforms were designed to prevent a total economic collapse and place the country on a path of sustainable growth.

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Oyedele noted that three years ago, the economy was in a precarious state, with people unable to pay for a $20 application with their ATM card, and many states unable to pay salaries, but now the government has made measurable progress in stabilising the economy and expanding social interventions.

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He admitted that one of the biggest challenges confronting the reform programme was widespread misunderstanding of government policies and declining trust in public institutions, which makes it harder to implement reforms and requires constant explanation.

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Oyedele lamented the spread of misinformation about government policies, saying false narratives often undermined genuine reform efforts, and that it is essential to work with data, acknowledge the sacrifices and the pain, while also recognising the little progress that has been made.

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On foreign exchange reforms, Oyedele said Nigeria had moved away from a period when investors were unwilling to bring capital into the country, and that today, the country has over $50bn in external reserves, and many investors are coming because they appreciate the reforms.

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He added that large-scale foreign direct investments, particularly in the oil and non-oil sectors, would take time to materialise, as investors take time to study reforms and build confidence, but the current state of the economy is better than it was in the past, and it will continue to improve in the future.

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The fifth Nigeria Employers’ Summit, organised by the Nigeria Employers’ Consultative Association, brought together policymakers, business leaders, and development partners to discuss the impact of ongoing reforms and strategies for improving enterprise competitiveness and inclusive economic growth.

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The Tinubu administration’s reforms, including the removal of petrol subsidy, exchange rate unification, and ongoing tax changes, have drawn praise from international financial institutions and investors but have also triggered inflationary pressures and increased the cost of living and doing business across the country.