NECA: Reform Will Lose Justification if Fiscal Gains Fail to Translate into Improved Living Standards, Lower Production Costs

Dike Onwuamaeze

Nigeria Employers’ Consultative Association (NECA) has declared that the current economic reform programme of the federal government would lose its justification if its resulting fiscal gains fail to translate into improved living standards for citizens, greater productivity, and more economic opportunities. Director General of NECA, Mr. Adewale-Smatt Oyerinde, stated this yesterday in a press statement, titled, “NECA Backs Oyedele on Fuel Subsidy Reform, Demands Stronger Citizen and Business-focused Interventions and Prudent Utilisation of Oil Windfalls.”

According to Oyerinde, NECA has thrown its weight behind the call by Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, for the federal government to sustain Nigeria’s fuel subsidy reforms, “while cautioning that the success of the policy must be measured by its impact on the economy, businesses, and the welfare of Nigerians rather than the volume of revenue accruing to government.”

He stressed, “The reform would lose its economic and social justification if the resulting fiscal gains failed to translate into improved living standards, lower production costs, job creation, and greater economic opportunities.

“While we support the government’s resolve to sustain subsidy reform, the ultimate measure of its success must be the tangible benefits it delivers to Nigerians.”

Fiscal savings and increased government revenue, according to NECA, “mean little to the average citizen if businesses continue to struggle, jobs remain threatened and households are increasingly unable to meet their basic needs.”

Oyerinde stated that subsidy reform must be complemented by broader economic measures aimed at stimulating private-sector investment and productivity, including policy consistency, regulatory efficiency, improved security, reduced logistics costs, and a more enabling business environment.

He said, “Sustaining subsidy reform is important, but sustaining businesses, protecting jobs and improving the wellbeing of Nigerians are equally critical.”

According to him, government must demonstrate that the sacrifices being made by citizens and businesses are yielding visible and measurable dividends.

Oyerinde urged the government to remain committed to the reform while prioritising effective and structured interventions, fiscal transparency, prudent management of oil windfalls and strategic investment in productive sectors.

He stated, “The objective must not simply be to increase government revenue, but to convert fiscal gains into economic prosperity.

“Nigerians must see the benefits through affordable energy, improved infrastructure, lower business costs, more decent jobs and a better quality of life.

“Anything short of this, risks undermining public confidence in the reform and its long-term sustainability.”

He also expressed concern over the persistent rise in the prices of petroleum products.

The NECA director-general said petrol prices were reportedly averaging N1,400 per litre and diesel prices about N1,900 per litre in some locations, which had further escalated operating costs for businesses and compounded the hardship faced by Nigerians.

According to him, the rising cost of energy, transportation, and production have continued to undermine business competitiveness, particularly among Micro, Small and Medium Enterprises (MSMEs), many of which are already contending with weak purchasing power, infrastructure deficits, and other structural challenges.

He stated, “The reality is that businesses cannot remain competitive when energy costs continue to rise without corresponding improvements in critical infrastructure.

“The increasing cost of petrol and diesel is putting enormous pressure on enterprises, threatening business sustainability, constraining expansion and placing jobs at risk.

“Government must ensure that the gains from subsidy reform are deliberately channelled towards reducing these pressures.”

Oyerinde urged the government to urgently strengthen targeted social protection programmes to cushion the effect of the reforms on vulnerable Nigerians, particularly low-income households and workers.

He emphasised that such interventions must be adequately funded, transparent, data-driven and structured to ensure that assistance reached those who genuinely need it.

He called for stronger collaboration among the federal, state and local governments to ensure that resources accruing from subsidy savings and improved crude oil revenues will produce measurable developmental outcomes.

Oyerinde cautioned, “Nigeria must resist the temptation to consume its oil windfalls arguing that additional revenue arising from higher crude oil prices presents an opportunity to address longstanding structural weaknesses in the economy.

“These resources must be invested productively in sectors that stimulate growth, reduce the cost of doing business, strengthen competitiveness and create sustainable employment.”

He identified electricity generation and distribution, transportation networks, roads, agricultural development, healthcare, education and industrial infrastructure as priority areas requiring strategic investment.

Oyerinde said addressing Nigeria’s persistent electricity challenges must rank among the government’s most urgent economic priorities, given the heavy dependence of businesses on expensive alternative energy sources.

He stated, “Reliable and affordable electricity would significantly reduce production costs, improve the competitiveness of Nigerian manufacturers, support MSME growth and stimulate employment. Without addressing the energy deficit, the benefits of subsidy reform may remain largely theoretical for many businesses and households.”

He also advocated increased investment in agriculture, storage facilities, and food processing and distribution infrastructure to reduce post-harvest losses, strengthen domestic food supply chains, and moderate food inflation.