Renowned economist and Chief Executive Officer (CEO), Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, has emphasised the need for government to provide strong support, including subsidies, to the power sector to fast-track socio-economic development of the country.
Specifically, Yusuf pointed out that electricity pricing conundrum would remain a tricky issue in 2025 because the country’s economy is too fragile to absorb the shocks of a fully deregulated or commercial electricity market.
According to him, the quality of transmission infrastructures and the consequent frequent collapse of the transmission grid require significant investment which the government would have to struggle to provide.
He, however, expressed concerns over the ongoing reforms in the sector, which have forced Nigerians to pay more for electricity despite prevailing economic hardships.
He highlighted the importance of constant and affordable energy in driving economic growth but noted that the introduction of different electricity tariff bands had strained the pockets of the average Nigerian and threatened the survival of small businesses.
“The outlook for the sector remains a major cause for worry in 2025. There are also the transition challenges of the states taking up regulatory responsibilities for electricity market.
Not many states have the capacity to manage this transition. This is therefore a major source of risk for the electricity sector in 2025,” he said.
He also declared that the tariff band initiative was unsustainable. He also criticised the implementation of the Compressed Natural Gas (CNG) policy, describing it as rhetorical.
Despite being introduced over a year ago, he noted, the policy has achieved little, with only a few operational centers across the country.
In particular, he noted that more generous fiscal incentives for the CNG and renewable energy solutions were urgently needed from government to achieve success in the country’s CNG sector.
The former Director-General of the Lagos Chamber of Commerce and Industry highlighted that the inefficacy of the CNG policy undermined its purpose as an alternative for Nigerians following the removal of fuel subsidies.
Dr. Yusuf maintained an optimistic outlook, urging Nigerians to focus on positive opportunities amid challenges.
He remarked that any business that survived 2024 in Nigeria is likely to thrive in subsequent years, though he noted that the hardships faced by citizens often overshadow the struggles of businesses.
He described the Tinubu administration’s reforms as ongoing projects, emphasising that while Nigerians can critique policies, they must focus on adapting their lives and businesses. In reviewing the economy’s performance in 2024, Dr. Yusuf identified four key dimensions of reforms.
However, he lamented the legacy problems of economic mismanagement, which he argued will require the current administration to pay significant political, economic, and social costs.
Highlighting key economic indicators, he noted that Nigeria’s GDP in 2024 was 3.6 per cent and is projected to grow to 4.6 per cent in 2025.
He also observed that financial institutions recorded the best performance in the third quarter with 31.9 per cent, followed by the insurance sector with 19.8 per cent.
However, he described these statistics as unhealthy for an economy that the banks are meant to serve, calling for a shift in priorities to promote growth.
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