Taking on debt without tangible initiatives is alarming, says Oyerinde, NECA Director-General

Nigeria's economy is facing significant challenges, including rising inflation, mounting debt, and worsening living conditions, despite claims of economic stability, according to Wale-Smatt Oyerinde, Director-General of the Nigeria Employers' Consultative Association (NECA).

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Oyerinde expressed concerns that ordinary Nigerians are yet to feel the impact of the government's economic reforms and stability measures, citing soaring transportation costs, expensive food, and rising accommodation expenses as major issues.

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The NECA Director-General also highlighted the worsening power crisis, which is feeding inflation and crippling businesses, emphasizing the need for the government to prioritize practical solutions that directly affect the people.

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Oyerinde stressed that citizens deserve to see tangible evidence of how public funds and subsidy savings are being utilized, warning that borrowing without visible projects has become increasingly worrisome.

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He argued that despite claims of macroeconomic stability, the average Nigerian worker and household are worse off due to declining purchasing power and high living costs.

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Oyerinde's assessment of the socio-economic condition of the nation is based on three or four different perspectives, including the impact of the current US/Israel-Iran conflict on the global economy.

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The conflict has created a challenging environment, with GDP and growth projections being reviewed globally, and Nigeria is not immune to these challenges, Oyerinde noted.

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He emphasized that while the government may claim stability at the macroeconomic level, this has not translated effectively to the microeconomic level, where the average worker and household are struggling.

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Oyerinde pointed out that the rate of inflation is making things worse for the average individual, and the government's efforts to cushion the challenges through increased welfare for public servants only benefit a small percentage of the population.

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The majority of citizens are facing these challenges, and Oyerinde urged the government to take immediate measures to ensure that Nigerians do not suffer more than expected, given the country's status as an oil-producing nation.

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Oyerinde expects the government to prioritize practical solutions that directly affect the people, such as addressing the issues of transportation, food, and accommodation, which are essential for the average Nigerian.

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He commended the government for introducing Compressed Natural Gas (CNG) buses but emphasized the need for greater investment in this area, as well as in light rail systems, to provide affordable and reliable transportation.

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Oyerinde also stressed the importance of addressing the issue of food security, which can be achieved through improved security, and the cost of education, which is becoming increasingly out of reach for the average Nigerian.

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He argued that the government must address the fundamental issues surrounding the ease of doing business for Micro, Small, and Medium Enterprises (MSMEs) and Small and Medium Enterprises (SMEs), which are critical to economic growth.

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Oyerinde noted that the challenges faced by MSMEs and SMEs are eventually transferred to the buying public, and the government must create structures that reduce pressure on the naira to achieve economic recovery.

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The naira's current exchange rate of around N1,300 to the dollar is not ideal, and Oyerinde believes it should be below N400 or N500 to the dollar to benefit the economy.

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He supported the Dangote Refinery and other productive ventures that can help conserve foreign exchange, reducing the demand for dollars and the pressure on the naira.

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Oyerinde agreed that the government should not bring back fuel subsidies but suggested that other areas, such as the pharmaceutical industry, could be subsidized to stabilize critical industries and trickle down gains to the economy.

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He emphasized that the government needs to set its priorities properly, determining what it wants to achieve and allocating resources accordingly, rather than just removing subsidies without providing alternative support.

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Oyerinde questioned what local governments are doing with their increased revenues, particularly in areas such as primary healthcare, which falls under their responsibility.

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He suggested that if every local government could establish at least one standard primary healthcare center, it would significantly address many health-related issues, and citizens should ask questions about how their resources are being utilized.

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Oyerinde stressed that the average Nigerian wants practical things that directly affect daily life, such as affordable transportation, food, and healthcare, rather than just economic growth on paper.

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He expressed concerns about the government's borrowing, which continues to rise, and the lack of visible gains from the removal of subsidies, suggesting that the economy may not be able to sustain this level of borrowing.

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Oyerinde noted that the issue of capacity to repay debt usually boils down to the debt-to-GDP ratio, and once this ratio goes beyond acceptable limits, creditors become cautious, and lenders assess the borrower's ability to repay based on fiscal discipline and project viability.