IMPI backs deregulation of petroleum sector, insists Nigeria’s economy is on course

The Independent Media and Policy Initiative (IMPI) has reaffirmed its support for the full deregulation of Nigeria’s downstream petroleum sector, asserting that the nation’s economy is moving in the right direction under the current reforms.

This endorsement comes amid widespread reactions from Nigerians to the recent surge in fuel prices following the removal of the subsidy on Premium Motor Spirit (PMS).

In a policy statement signed by its Chairman, Niyi Akinsiju, IMPI described the economic challenges as temporary and a necessary part of correcting deep-rooted distortions in Nigeria’s economy.

“Based on our extensive research, we can confidently state that while the cost of living remains high, there are clear indicators that the federal government’s policies are gradually addressing the long-standing issues that nearly choked the economy prior to the Tinubu administration,” Akinsiju noted.

IMPI highlighted several key reforms initiated by the federal government, including the establishment of the Infrastructure Support Fund for Nigeria’s 36 states. The fund, approved by President Bola Tinubu in July 2023, aims to mitigate the effects of the petrol subsidy removal.

According to the group, the government’s fiscal discipline is demonstrated by the N100 billion monthly deductions from the federation’s gross revenue, resulting in a savings total of N900 billion between November 2023 and September 2024.

The policy group also praised the increase in federal revenue, which surged to N9.1 trillion in the first half of 2024 compared to N5.2 trillion in the same period of 2023. This, they argued, is a testament to the success of the Tinubu administration’s reforms.

“We align with the federal government as it transitions from the outdated dependency model to a liberal, free-market, enterprise-driven economy. While there are inevitable challenges associated with weaning the economy off subsidies, we believe Nigeria cannot continue in the old ways,” the statement emphasized.

IMPI also pointed to the positive performance of various sectors, particularly manufacturing, which recorded a nine-month high in tax contributions during the second quarter of 2024. The manufacturing sector paid a combined total of N405.86 billion in taxes, showcasing resilience and productivity despite ongoing economic challenges.

The group further highlighted the impressive growth in Nigeria’s non-oil sector, with foreign exchange earnings rising to $2.7 billion in the first half of 2024, driven by agriculture, solid minerals, and manufacturing.

Nigeria’s cocoa exports, for example, accounted for 42.4% of the N1.04 trillion agricultural exports in the first quarter of 2024, a significant jump from the previous year.

IMPI noted that the shift from raw agricultural exports to semi-processed and manufactured goods reflects a new direction for Nigeria’s economic development, crediting these improvements to the ongoing economic reforms.

The policy group also observed a positive shift in employment figures. According to the Nigeria Labour Force Survey (NLFS) for Q1 2024, the self-employed working population declined by 3.3 percentage points, while wage employment saw a corresponding increase. This shift, IMPI stated, indicates that more Nigerians are finding formal employment, signaling a modest but steady improvement in the country’s workforce.

“As the economy continues to gain traction, we expect even greater absorption of workers from the informal sector into more formal, wage-paying jobs,” IMPI concluded.

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