Professor Ndubisi Nwokoma, a prominent financial economist and Director of the Centre for Economic Policy Analysis and Research at the University of Lagos, has called on the Nigerian government to reduce the cost of governance and address critical fiscal challenges.
In an interview with ARISE NEWS on Wednesday, Nwokoma emphasized the need for urgent reforms to improve the country's economic environment.
Nwokoma pointed out that the current business climate in Nigeria is fraught with challenges that severely hamper manufacturers.
“The business environment is not conducive at all. Manufacturers are struggling due to infrastructure deficiencies, energy instability, market policy uncertainty, and barriers to foreign capital inflow,” he stated.
These issues, he explained, contribute significantly to the inflationary pressures that Nigeria faces. “Inflation is a major problem, and it's linked to several factors including high interest rates. If inflation is higher than the interest rate, it becomes problematic for businesses and the economy,” Nwokoma noted.
According to Arise TV, he stressed the importance of addressing production issues as a fundamental part of economic policy. “Raising interest rates without considering other economic fundamentals causes problems. Our unstable system hampers productivity. Instability and insecurity lead to inflation because there is no production,” he said.
Nwokoma also highlighted the high interest rates in Nigeria compared to other countries. “The central bank has raised rates to nearly 27% to combat inflation and attract foreign capital, but this makes borrowing expensive and stifles business growth,” he explained.
He called for a more balanced approach to economic management, suggesting that the government focus on cutting down the cost of governance and tackling fiscal issues.
“We must direct funds towards economic growth. The government should cut governance costs, address fiscal issues like expenditure and oil theft, and improve the agricultural environment. These steps can reduce business costs and subsequently lower interest rates,” Nwokoma advised.
Nwokoma concluded by emphasizing the need for comprehensive reforms to create a more favorable business environment. “The government needs to critically assess the business climate and implement policies that support economic stability and growth. Only by addressing these fundamental issues can we hope to see significant improvements in Nigeria’s economy,” he said.