The Chairman of the Nigerian Economic Summit Group, Niyi Yusuf, has advocated for urgent sectoral reforms as Nigeria faces a tough road ahead.

He pointed out that inflation, high interest rates, and sluggish sector growth continue to challenge economic stability and might linger this year if not adequately tackled.

Yusuf offered an assessment of Nigeria’s 2025 economic outlook during his speech at the Lagos Business School recently, where he emphasised the urgent need for reforms to stabilise the economy and foster sustainable growth.

He highlighted the disparity in sectoral performance and revealed that only four sectors — oil and gas, ICT, finance, and water resources — grew by more than five per cent in 2024. However, he noted that these sectors contributed little to job creation.

“The sectors that should create jobs, like agriculture and construction, are underperforming,” he stated.

With over 92 per cent of Nigerians working in the informal sector, he stressed the need for policies that prioritise decent job opportunities, in line with Sustainable Development Goal 8.

According to Yusuf, inflation remains a pressing concern, with rates peaking at 34 per cent in mid-2024 and projected to stay above 20 per cent through 2025.

He explained that food inflation, a critical driver, stems from insecurity that has displaced farmers across the north and from post-harvest losses, which account for nearly 50 per cent of perishables.

“Without addressing insecurity and improving agricultural productivity, food prices will remain a significant burden,” Yusuf warned.

He also highlighted the challenges posed by Nigeria’s foreign exchange crisis, where crude oil and gas account for 96 per cent of earnings. While efforts by the Central Bank of Nigeria have narrowed the gap between official and parallel market FX rates, the economy remains heavily reliant on oil revenues.

The NESG chairman called for diversification, noting that an import-dependent economy with high inflation and a volatile exchange rate “makes the poor poorer.”

He noted that monetary policy, aimed at curbing inflation, has inadvertently strained businesses. With interest rates at record highs, borrowing has become prohibitive, leading to rising non-performing loans.

“It is difficult for businesses to take loans at 10 per cent to 13 per cent interest and remain profitable,” Yusuf remarked.

 He added that high energy and security costs — accounting for 55 per cent of operating expenses for many businesses — further compound the problem.

On infrastructure, Yusuf pointed out inefficiencies in energy and transportation.

 “We need investment in infrastructure, including digital and energy systems, to reduce costs for businesses,” he said.

He decried the excessive checkpoints along trade routes, such as the 62 between Agbara and Seme, which hinder export growth and inflate costs.

Despite these challenges, Yusuf identified areas of progress.

 Meanwhile, Yusuf commended efforts to liberalize FX policies, which have increased market turnover, and expressed optimism about improving trade balances as crude oil production rebounds.

The NESG boss also highlighted the potential of local sourcing, policy advocacy, and financial literacy to help businesses navigate economic turbulence.

Looking to 2025, Yusuf offered a roadmap for recovery.

He urged the government to focus on policy stability, institutional reforms, and investment in security and infrastructure.

“We must stabilize the energy base, address insecurity, and streamline governance by reducing the number of MDAs,” he said, referring to the over 890 ministries, departments, and agencies that burden public resources.

For businesses, Yusuf recommended strategies to build resilience, including local sourcing, cost optimization, and alignment with changing consumer behaviors.

He also stressed the importance of embracing technology and artificial intelligence to unlock new opportunities.

“Every business must think of how to leverage AI and expand its market beyond Nigeria,” he advised.

Yusuf concluded with a call for collaboration, urging individuals to join policy advocacy groups and chambers of commerce to amplify their voices.

“We all must lobby for the changes we need,” he said.

He also emphasised the need for regulatory reforms that are “pro-growth and pro-consumer” to foster a conducive environment for businesses.

As Nigeria braces for another challenging year, Yusuf’s insights highlighted the urgent need for coordinated efforts by the government, private sector, and civil society to address economic vulnerabilities and chart a path toward sustainable growth.