Rising energy costs undermining business competitiveness —NECA

THE Nigeria Employers’ Consultative Association (NECA) has lamented the rising costs of energy, transportation and production, adding that the challenges have continued to undermine business competitiveness, particularly among Micro, Small and Medium Enterprises (MSMEs),  already contending with weak purchasing power, infrastructure deficits and other structural challenges.

The association’s Director-General, Mr. Adewale-Smatt Oyerinde, argued that businesses would remain non-competitive when energy costs continue to rise without corresponding improvements in critical infrastructure.

He added that the increasing cost of petrol and diesel has continued to put enormous pressure on enterprises, threatening business sustainability, constraining expansion and placing jobs at risk.

Oyerinde expressed serious concern over the persistent rise in the prices of petroleum products, noting that petrol prices, reportedly averaging N1,400 per litre and diesel prices of about N1,900 per litre in some locations, had further escalated operating costs for businesses and compounded the hardship faced by Nigerians.

The NECA boss, therefore, urged the government to ensure that the gains from subsidy reform are deliberately channelled towards reducing those pressures, so as to bring some form of relief to Nigerians.

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Oyerinde also charged the Federal Government to urgently strengthen targeted social protection programmes, in order to cushion the impact of the reforms on vulnerable Nigerians, particularly low-income households and workers.

On the call by the Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, for the Federal Government to sustain fuel subsidy reforms, the NECA boss stated that while the association is fully in support of the call, it would however want the policy’s success to be measured by its impact on the economy, businesses and the welfare of Nigerians rather than the volume of revenue accruing to government.

Oyerinde acknowledged that subsidy reform remains a critical step towards restoring fiscal sustainability, reducing pressure on public finances and freeing resources for national development.

He noted that the reform would lose its economic and social justification if the resulting fiscal gains failed to translate into improved living standards, lower production costs, job creation and greater economic opportunities.

“While we support the government’s resolve to sustain subsidy reform, the ultimate measure of its success must be the tangible benefits it delivers to Nigerians. Fiscal savings and increased government revenue mean little to the average citizen if businesses continue to struggle, jobs remain threatened and households are increasingly unable to meet their basic needs,” Oyerinde stated.