The executive director (CEO) of the Center for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, has called for the repositioning of the electricity sector and to address the persistent challenges of the oil sector downstream to allow a greater entry of investments in the country. by 2023.
Yusuf said that as Nigeria ends 2022 with a fragile growth performance, the government needs to take a strong stance on energy sector reforms and full implementation of the Petroleum Industry Act (PIA) to unlock investment. in the next year.
Reviewing the performance of the economy in 2022 and at the same time setting the agenda for 2023, Yusuf recalled that the poor growth performance was a reflection of the various headwinds facing the Nigerian economy.
He listed the factors to include: macroeconomic instability, shrinking fiscal space, rising public debt, rising inflationary pressures, currency depreciation, and illiquid foreign exchange.
Others are; rising energy costs, weakening purchasing power, inherited structural constraints, persistent insecurity, and crippling trade facilitation problems.
However, Yusuf, who was director general of the Lagos Chamber of Commerce and Industry (LCCI), noted that to unlock growth and investment in 2023, the government needs to undertake some urgent reforms.
He postulated that the enactment of the PIA was an important step towards oil and gas sector reform that promises to transform the sector through the creation of a legal and regulatory framework that would inspire much higher levels of investor confidence.
He said Nigerians would like to see more commitment to the implementation of the PIA, adding that “deregulation of the downstream oil sector is a major economic reform imperative. This is inevitable if we are to unlock investment in the sector and put an end to the perennial fuel shortages and monopoly structure of the sector.”
He also points out the need to also consolidate the reform of the electricity sector.
Yusuf said: “An enabling environment must be created to sustain current private sector investment in the sector and attract new private capital to the electricity sector. Urgent reforms are vital with respect to electricity tariffs, metering, and the deepening of the energy matrix. We need strong incentives [fiscal and monetary] to promote private investment in renewable energy”.
He also urged proper reform of the budget and allocation processes to prioritize infrastructure financing and human capital development.
This, in his opinion, would boost the productivity and competitiveness of the economy.
“The adoption of these reform initiatives would guarantee progress towards fiscal consolidation, reduction of the fiscal deficit, reduction of the need for borrowing and reduction of the debt service burden.” he said.