Centre for the Promotion of Private Enterprise (CPPE)  has identified  worsening insecurity in the country as a major problem for investors in the economy. The centre noted that many industrialists especially those who are in the agro-allied sector were grappling with challenges getting raw materials from the crop producing areas, which has continued to negatively impact capacity utilisation, turnover, cost of production and the value delivery to shareholders.

The CPPE which made the disclosure in its 2022 first-quarter economic review noted that some now source raw materials from neighbouring West African countries, adding that Insecurity has also created a serious country risk and reputational problem for our country.

ge rate depreciation, liquidity crisis in the foreign exchange market, the spiking inflationary pressures.

On the fiscal operations of government, Yusuf explained that the figures released by the Finance Minister, Mrs. Zainab Ahmed, during the presentation of the 2023-2025 Medium Term Expenditure Framework, painted a gloomy picture of the state of government finances, suggesting that the government is on the brink of bankruptcy.

He berated the debt service to revenue ratio for the first four months of the current year which is over 100%, noting that  the implication was that the actual revenue of government over the period is not sufficient to service debt. “Therefore, financing of the operations of government – personnel cost, overhead cost, capital expenditure and even part of the servicing of the debt will have to come from additional borrowing. These portend severe vulnerabilities for the Nigerian economy.

“The fiscal outlook is clouded by elevated downside risks in the near term, driven largely by the huge burden of financing petrol subsidy, fiscal leakages, and unsustainable public debt trajectory. 

“The outlook poses significant risks to macroeconomic stability amid heightened inflationary pressures, depreciating currency and increasing exchange rate volatility.

The GDP growth of 3.11% in the first quarter of 2022 marked the sixth consecutive quarters of GDP growth in the Nigerian economy and offered a momentary glimmer of hope.

However, the increasing economic headwinds may dim the growth prospects for subsequent quarters.

As Published on SunNewsOnline