TINUBU: It’s been one year of corrective reforms but pains must ease – Muda Yusuf
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Dr. Muda Yusuf, a former Director General of Lagos Chamber of Commerce and Industry (LCCI), is the Chief Executive Officer of the Centre for the Promotion of Private Enterprise.
Yusuf says the performance review of one year of the Tinubu administration requires proper contextualisation.
“There were significant legacy issues which significantly impacted performance outcomes, especially from a macroeconomic point of view”, Yusuf said in a note to Sunday Vanguard at the weekend.
“There was a legacy of an incredibly dysfunctional foreign exchange market riddled with round-tripping and all manners of malpractices.
“Secondly, there was a fuel subsidy regime which created opportunities for corruption and bleeding of the country. The state of affairs in the sector was a major disincentive to investors in the downstream oil sector.
“The sector became a hotbed of corruption of huge proportion.
“The huge backlog of mature foreign exchange obligations was in excess of 7 billion dollars.
“This of course created a major liquidity crisis in the economy.
“There was vandalisation of oil production facilities with incredible impunity.
“The administration has made significant progress in restoring some sanity to the oil-producing areas even though it is a work in progress.
“The truth is that reforms take time to be prepared and executed. It could take even longer for the results to be felt.
“But my view is that the reforms were necessary to pull back the economy from the brink.
“Much has been achieved with fiscal consolidation. Government revenue had improved significantly following the reforms. “There were also tax reform initiatives.
“The point to stress is that much of the first year was devoted to corrective reforms which were in many instances also painful.
“But the reforms were inevitable.
“The administration could do better about the speed of delivering mitigating measures to ease the pains of the reforms.
“There is also a need to address the volatility in the foreign exchange market. “Frequent swings in the exchange rate are very detrimental to business because of the uncertainty that comes with it.
“The CBN should also address the frequent changes in the exchange rate for import duty computation”.
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