Reform Wins Fading as Naira, Prices Soar – CPPE

The Centre for the Promotion of Private Enterprise (CPPE) has stated that rising inflation and the depreciation of the naira are undermining the real value of fiscal and tax reforms in Nigeria.

CPPE’s Chief Executive Officer, Muda Yusuf, made this known in a statement issued on Sunday.

According to Yusuf, two landmark policy measures — fuel subsidy removal and the unification of exchange rates — have significantly increased government revenue, expanded fiscal space, and improved the capacity for public investment.

He noted that Nigeria has recorded improved collections from Value Added Tax (VAT) and Company Income Tax (CIT), indicating stronger compliance and a gradual economic recovery.

The organisation also observed that subnational governments have begun to record higher revenues and are allocating more funds to agriculture, infrastructure, and social development.

However, CPPE warned that rising inflation, which stood at 21.12% in September, and the exchange rate depreciation to ₦1,455 per dollar as of Friday, have reduced the real value of these fiscal gains achieved over the past two years.

It added that Nigeria’s $36.7 billion budget remains significantly lower than that of other major African economies such as South Africa ($141 billion), Algeria ($126 billion), and Egypt ($91 billion), which limits the country’s fiscal capacity for transformative investments in infrastructure, human capital development, and social welfare.

To sustain progress, CPPE urged both the federal and state governments to prioritize critical sectors such as roads, power, ports, and digital infrastructure, to reduce business costs and boost competitiveness.

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The think tank outlined several policy recommendations, including:

• Measure fiscal gains realistically by adjusting for inflation and exchange rate effects.
• Broaden and diversify the revenue base through improved tax efficiency, expanding the tax net, and optimizing non-tax revenues.
• Prioritize high-impact spending, focusing on infrastructure, food systems, productivity, and security.
• Strengthen subnational fiscal capacity, promoting accountability and efficient resource use.
• Implement tax reforms with flexibility, maintaining dialogue with stakeholders.
• Reinforce fiscal discipline across all levels of government.

CPPE concluded that while Nigeria’s fiscal and tax reforms have improved revenue and fiscal sustainability, the next phase must deepen revenue diversification, enhance spending efficiency, and align fiscal outcomes with real economic performance.

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It added that with prudent management, stakeholder collaboration, and social sensitivity, these reforms can lay a solid foundation for a resilient and inclusive Nigerian economy.