How Nigeria can revive sectors in recession

In a bid to salvage sectors still grappling with recession in Nigeria's economy, the Centre for the Promotion of Private Enterprise (CPPE) emphasizes the crucial need for deliberate policy adoption and implementation. Muda Yusuf, the CEO of CPPE, sheds light on the struggling sectors and advocates for strategic interventions to revive them. Despite a GDP growth of 3.54% in the latest Q2, certain sectors continue to face challenges, signaling the urgent need for targeted efforts to stimulate growth. The service sector has displayed resilience, contributing significantly to the GDP, while production sectors like agriculture, manufacturing, and construction demand attention due to their critical role in driving the economy. However, sectors such as crude oil and gas, textile, and motor vehicle assembly are still in recession, pointing to underlying issues that require immediate action. The energy sector, particularly crude oil and gas, witnessed a significant contraction, reflecting challenges such as insecurity, oil theft, and dwindling investor confidence. Similarly, the textile industry has struggled for years, plagued by high energy costs, foreign exchange volatility, and import dependency. To address these issues, Yusuf highlights the need for comprehensive policy interventions and fiscal incentives tailored to each sector's unique requirements. In the textile industry, for instance, reducing energy costs and enhancing access to foreign exchange are imperative to spur growth and competitiveness. Moreover, promoting investments in renewable energy, such as solar power, could alleviate the burden of high energy costs on manufacturers and enhance sustainability. Yusuf emphasizes the importance of incentivizing renewable energy initiatives and decentralizing the grid to ensure more efficient and reliable electricity supply. The resilience of the service sector, according to Yusuf, can be attributed to technology adoption, innovation, and lower energy consumption compared to production sectors. The service sector's adaptability and scalability have enabled it to weather challenges more effectively, underscoring the significance of leveraging technology and innovation for sustainable growth. Looking ahead to the next quarter, Yusuf foresees continued challenges stemming from structural constraints, foreign exchange policies, and ongoing supply chain disruptions. The looming impact of the Ukraine-Russia war and high energy costs are expected to further impact economic performance in the coming months. Addressing these challenges will require a concerted effort to address policy bottlenecks, enhance sector-specific interventions, and promote sustainable practices across industries. While immediate changes may not be forthcoming, Yusuf remains optimistic about the potential for gradual improvement in economic conditions by early next year, provided that necessary reforms are set in motion.