Nigeria @ 65: CPPE Urges Diversification, Fiscal Discipline, Inclusive Growth

As Nigeria marks its 65th year of independence, the Centre for the Promotion of Private Enterprise (CPPE) has warned that structural weaknesses, fiscal fragilities, and overdependence on oil revenues continue to threaten the nation’s economic stability.

In a commentary released on Monday, CPPE Director and Chief Executive Officer Dr Muda Yusuf said that despite decades of reforms and periods of growth, the Nigerian economy remains constrained by recurring crises, weak diversification, and unsustainable public finance practices.

According to Yusuf, the trajectory of Nigeria’s economy since 1960 has been marked by cycles of boom and bust, beginning with a largely agrarian foundation at independence that quickly gave way to oil dominance in the 1970s. While the early post-independence years saw agriculture contribute 60 per cent of Gross Domestic Product (GDP) and employ the majority of Nigerians, the discovery of oil distorted fiscal structures and weakened domestic productivity.

The neglect of agriculture, coupled with rising import dependence and rent-seeking behaviour, created vulnerabilities that persist today.

He noted that the oil boom enriched the country but exposed it to external shocks that repeatedly destabilised public finances.

Nigeria has slipped into eight recessions since independence, in 1967, 1975, 1978, 1981–83, 1993, 2016, and 2020, each triggered by global oil price swings or policy missteps.

“Building resilience requires decisive diversification, credible stabilisation mechanisms, and fiscal discipline,” Yusuf stressed, warning that failure to act will keep the economy trapped in cycles of volatility.

The CPPE commentary also highlighted the painful adjustment period of the 1980s, when the collapse of oil prices forced Nigeria to embrace the Structural Adjustment Programme (SAP).

While the reforms opened the economy to market principles, they also pushed millions into poverty, worsened inflation, and deepened import dependence. Yusuf observed that lessons from that period show reforms must be carefully sequenced and accompanied by social protection to shield citizens from economic shocks.

On governance in the oil and gas sector, CPPE said decades of poor management, corruption, and rent-seeking had undermined growth, citing the collapse of state-owned refineries, crude oil theft, and reliance on imported petroleum products.

However, Yusuf expressed optimism about emerging developments such as the Dangote Refinery and ongoing energy sector reforms, which he described as potential game-changers for industrial growth and energy security.

The report equally underscored the impact of insecurity on economic productivity. Insurgency, banditry, kidnappings, and herder-farmer conflicts over the past two decades have crippled agriculture, manufacturing, and mining while discouraging investment.

Yusuf said restoring security must be treated not only as a social imperative but also as an economic priority to rebuild investor confidence.

Despite persistent challenges, CPPE pointed to bright spots in the economy.

The ICT and telecommunications revolution, with over 165 million active lines compared to fewer than 20,000 at independence, has transformed commerce, governance, and banking.

The financial services sector has deepened, fintech has boomed, and Nigeria’s cultural industries, Nollywood and Afrobeats, have gained global recognition. Yusuf argued that these successes show the potential of non-oil-led growth if supported by infrastructure, power supply, broadband expansion, and consistent policies.

Macroeconomic instability, however, remains a pressing concern.

The naira, once stronger than the U.S. dollar in the 1970s, has plunged to ₦1,600/$ in 2024, eroding purchasing power and raising production costs.

Rising debt levels, coupled with high debt-service-to-revenue ratios, have left little fiscal room for infrastructure investment.

Yusuf said Nigeria must restore currency stability through credible monetary policy, expand foreign exchange supply by boosting non-oil exports, and raise non-oil revenues without stifling enterprise.

He acknowledged recent reform, including fuel subsidy removal, exchange rate unification, and tax policy changes, as bold steps toward stability, though they have inflicted short-term hardship through inflation and reduced household incomes.

To maintain reform momentum, Yusuf urged the government to implement social protection measures such as cash transfers, food security programs, and job creation initiatives.

Looking to the future, CPPE emphasised the need for Nigeria to deepen diversification in agriculture, manufacturing, and solid minerals; strengthen governance and transparency; invest aggressively in infrastructure and human capital; and embed inclusivity in growth strategies to tackle poverty and unemployment.

Yusuf maintained that Nigeria’s population of over 230 million represents both a huge opportunity and a daunting challenge, investing in education, healthcare, and vocational training is critical to harnessing its demographic dividend.

“Nigeria’s 65-year economic history is one of resilience, missed opportunities, and vast untapped potential,” Yusuf concluded.

“The current reform agenda provides a rare opportunity to reset the economy on a path of stability, competitiveness, and shared prosperity.

What is required now is consistency, institutional strengthening, and a deliberate effort to ensure growth translates into better living standards for citizens,” he said.