Judah Invests

You know… When I hear how some people try to overfixate on “reforms”, “reforms”… “ehn, change from the old order”, “this hasn’t happened before”, “this is the best thing after jollof rice”, I just laugh and shake my head. It is true that some tough and much-needed policies have been implemented. And yes, some credit should be given for the political will to take decisions that previous administrations struggled to make. But you will not pretend that there have not been trade-offs, or that Nigerians are not paying dearly for some of these decisions. Let us look at a few things. 1. Fuel subsidy removal • Subsidy was removed, reducing a major fiscal distortion. That is a +1. • But the cost of living has been brutal, with households bearing a significant part of the adjustment. That is a -1. What has been the net gain? How much of the fiscal savings has translated into productive investment, better public services and improved living standards? ————— 2. Foreign exchange market • The FX market has become considerably more stable. That is a +1. • But businesses are contending with extremely high interest rates, which increase their cost of capital, erode profitability and constrain investment. That is a -1. What is the net gain? Beyond stabilising the exchange rate, what progress are we making in creating an environment where businesses can actually thrive? ————— 3. Oil and gas sector • Local oil majors have been ramping up production and expanding capacity. That is a +1. • But some IOCs have been exiting certain asset categories, raising questions about the attractiveness of Nigeria’s operating environment and the sustainability of investment in the sector. That is a -1. What is the net progress? Are we seeing higher aggregate production, more investment and improved operational efficiency across the industry? ————— 4. Government revenue • Revenue across all tiers of government has expanded significantly. Another +1. • But a substantial portion of government revenue is still absorbed by debt servicing, leaving limited fiscal space for infrastructure, healthcare, education and other productive expenditure. That is a -1. Again, what is the net progress? Is the improvement in revenue translating into better fiscal outcomes and improved public welfare? ————— My point is simple. You cannot selectively highlight the positives while glossing over the costs and unintended consequences. Equally, you cannot dismiss the reforms simply because they have come with painful adjustments. Both sides of the equation matter. Some of these costs may be transitional, and some reforms may take years to deliver their full benefits. But that makes it even more important to examine what is being done to ensure that the intended benefits eventually materialise. When you want to talk about economic progress, talk about the net progress. Look beyond the policy announcements and the headlines. Examine the actual outcomes. Are we becoming more productive? Are businesses becoming more competitive? Are households better off? Is the economy creating more opportunities? Are we building a more sustainable fiscal position? Ultimately, the objective of economic reforms is not to win an award for implementing difficult policies. It is to make the economy work better and improve the welfare of its people. That is when I know that value has actually been added.