Tinubu urges patience as households tighten belts, focus on necessities

• High interest rates, insecurity, multiple taxes top business concerns
• Households pessimistic about economy, project higher expenses ahead

Notwithstanding the appeal by President Bola Tinubu about the gains of his reforms, households have expressed pessimism over the rising cost of living in the country and have projected that transportation, house purchases, car purchases, rents, and medical expenses will increase over the next six months.

According to the newly released ‘Households Expectation Survey’ by the Central Bank of Nigeria (CBN), consumers indicated they would spend their incomes only on basic items such as food, other household essentials, education, transportation, electricity, and medical expenses.

President Tinubu said yesterday that his ongoing economic reforms required only short-term adjustments from Nigerians. He emphasised that the reforms were essential to redirect the nation’s resources towards productive investments that would yield long-term benefits for the people.

According to him, the reforms have already shown positive results, setting the stage for sustainable economic growth and improved prosperity for all Nigerians.

The CBN’s overall Consumer Confidence Index and outlook are attributed to consumers’ views on three key dimensions: economic conditions, family financial situation, and family income.

The CBN said, “More consumers believe that the cost of transportation, house purchases, car purchases, rents, and medical expenses will increase over the next six months in the following order.

“Households anticipate spending their income on basic expenditure items like food and other household essentials, education, transportation, electricity, and medical expenses across all the periods reviewed. However, they do not intend to allocate a substantial portion of their income to items like house purchases or car purchases during the period under review.”

The survey also indicated that households do not plan to spend their earnings on purchasing motor vehicles, buildings, or landed properties within the review months.

“The Buying Condition Index for big-ticket items like consumer durables, motor vehicles, and buildings and landed properties indicated that most respondents consider the current month unfavourable for purchasing these items. Consumers also do not believe that the next three to six months are ideal periods to buy these items.”

ALSO, the latest CBN’s October Business Expectations Survey indicated that businesses across Nigeria are grappling with a challenging operating environment, as high interest rates, insecurity, and multiple taxes rank among the most pressing constraints.

The survey, which provides insights into the prevailing economic challenges businesses face, highlights persistent hurdles that could stifle growth and investment in the country. The survey aims to gauge economic sentiment and challenges, revealing that high interest rates top the list of obstacles, a concern shared across industries.

According to the survey, businesses cite the elevated cost of borrowing as a significant deterrent to expansion and day-to-day operations. Insecurity was ranked as the second-most critical issue, with firms expressing concerns over the impact of violence and criminal activity on their operations.

Security challenges have increased business costs through heightened expenditure on private security and discouraged potential investments in regions heavily affected by such risks.

“The outlook on the macroeconomy for November 2024, January and April 2025 indicates that the Northeast region continues to drive optimism on the economy for the review periods,” it said. Additional constraints identified by the survey include multiple taxation, unreliable power supply, and an unfavourable economic climate.

“Respondents were optimistic about the overall business outlook in October 2024. However, insecurity, high interest rates, an unfavourable economic climate, financial problems, and high or multiple taxes, as well as inadequate power supply, were identified as key factors constraining business activities,” the CBN said.

Multiple layers of taxes imposed by various governmental agencies have weighed heavily on businesses, particularly small and medium-sized enterprises, which struggle to absorb these costs.

An insufficient power supply continues to push companies towards costly alternatives, such as generators, which further increase operating expenses. Despite these hurdles, the survey suggests cautious optimism among Nigerian businesses about future growth, with several sectors, including agriculture and non-market services, forecasting modest improvements in business confidence and expansion plans in the coming months.

However, manufacturing remains a sector of concern, with respondents citing a low outlook due to the cumulative effect of these constraints. The survey also sheds light on exchange rate expectations, with respondents predicting a near-term depreciation of the naira but an appreciation in the medium term.

The currency has faced pressure following exchange rate unification policies, leading to a marked decline in value earlier this year. A depreciating naira continues to challenge import-dependent industries, as rising costs affect input prices and consumer demand.
TINUBU spoke in Abuja at the opening ceremony of the 2024 edition of the Comptroller-General of Customs Conference.

The President, who was represented at the conference by the National Security Adviser, Mallam Nuhu Ribadu, listed some of the gains of his policies in less than two years, stressing that the administration had received over $30 billion in commitments from foreign investors.

Tinubu said, “This achievement demonstrates that our policies are yielding positive results, making Nigeria increasingly attractive for domestic and international investors. More importantly, these improvements create new opportunities for Nigerian businesses to participate more actively in global trade.

“Our focus has been on strengthening what works, refining what needs improvement, and introducing new initiatives where gaps exist. We recognised that certain economic policies, though useful in their time, needed to be realigned with current global economic dynamics to better serve our national interests and the well-being of our people.

“We pursued this vision and embarked on bold and necessary economic reforms. Working with expert advice and carefully considering our unique circumstances, we implemented strategic policy adjustments to strengthen our economy. Removing fuel subsidies and unifying our exchange rate system were crucial steps towards building a more transparent and sustainable economic framework.”

He said, “Our commitment to creating an enabling business environment has resonated with the international investment community. The confidence in our economy is reflected in the significant surge in foreign direct investments.”

Tinubu also urged federal agencies to demonstrate initiative in identifying opportunities within their mandates that would best serve and advance national aspirations.