NECA: Tinubu’s Reforms Have Not Fully Transformed the Business Environment

The Nigeria Employers’ Consultative Association (NECA) has said businesses across the country are yet to enjoy the full benefits of the ongoing economic reforms by the Federal Government.
The Director-General of NECA, Mr Adewale-Smatt Oyerinde, said this in an interview with the News Agency of Nigeria (NAN) on Sunday in Abuja, while assessing the administration’s economic performance.
Oyerinde said the removal of fuel subsidy and liberalisation of the foreign exchange market reflected government’s commitment to market-driven economic policies and improved transparency across sectors.
The reforms had improved fuel availability, and reduced recurring supply interruptions and sent a signal of policy consistency to local and foreign investors, he said.
He said there were signs of improved investor confidence, but many domestic businesses, especially Micro, Small and Medium Enterprises (MSMEs), were still grappling with operational challenges.
Depreciation of the naira had raised production costs, impacted competitiveness and increased operational risks for many businesses, he said.
“Many private sector players are yet to see the expected benefits of the reforms as they continue to battle inflation, energy costs and exchange rate volatility,” he said.
Oyerinde stated that declining purchasing power of consumers and escalating production costs had put pressure on businesses, and some firms were adjusting investment plans and operations according to the prevailing economic conditions.
Oyerinde said developments in housing, industrial investments and local petroleum refining have created opportunities and contributed to an improved fuel supply on infrastructure and refining.
But he identified power supply as a major challenge facing businesses, citing persistent grid instability and reliance on alternative energy sources.
“Despite ongoing reforms in the power sector, insufficient electricity supply is the number one constraint to business productivity and competitiveness across the country,” he said.
Oyerinde said while some macroeconomic indicators such as foreign reserves and government revenues had improved, the gains had yet to be broadly reflected in business operations and household welfare.
“Inflation, high energy prices, multiple taxation, logistics challenges and weak consumer spending continue to constrain productivity and limit business expansion,” he said.
The NECA director-general said that employers were cautious about large-scale recruitment amid high borrowing costs, foreign exchange volatility and rising operating expenses.
In his view, sustainable job creation will hinge on deeper structural reforms that lower the cost of doing business and improve access to affordable finance.
He called on government to focus on stable power supply, reduce energy costs, harmonise tax, policy consistency and foreign exchange stability to fast-track economic recovery and build investor confidence.
Oyerinde also called for greater investment in technical and vocational education, digital skills acquisition and stronger public-private sector partnerships to boost workforce readiness and enterprise growth.
He called for patronage of made in Nigeria goods, infrastructure development and improved security in key business and investment corridors, to support local production.
Oyerinde was optimistic that sustained reforms and targeted interventions would enable businesses to enjoy broader benefits capable of driving growth, employment and long-term economic development.
N4.5trn market gain in May driven by banking, consumer stocks
Meanwhile, the equities market maintained its positive momentum in May, with investors gaining N4.514 trillion as renewed buying interest in financial services and consumer goods stocks lifted overall market performance.
The market capitalisation rose by 2.89 per cent to close at N160.508 trillion in May, against N155.994 trillion recorded at the beginning of the month.
Likewise, the All-Share Index (ASI) rose by 8,107.66 points, or 3.35 per cent, to close at 250,385.47 from 242,277.81 as at end of April.
The performance, however, lagged behind the exceptional rally recorded in April when investors made gains of N26.185 trillion.
The market rally in May was led by gains in financial services, consumer goods and selected industrial stocks.
Dr Bennett Eze, Head of Research and Development, Chartered Institute of Stockbrokers, told the News Agency of Nigeria (NAN) in Lagos on Sunday that the performance was a reflection of a more cautious and selective investment environment.
Eze attributed the slower growth recorded in May to profit-taking by investors after the historic rally witnessed in April.
He said that many investors moved to lock in gains, especially in banking, industrial and consumer goods stocks, while the market also entered a consolidation phase as investors reassessed stock valuations.
“The slower pace of market growth in May could also be associated with rotation into fixed-income instruments, valuation concerns and global uncertainties.
“Despite the attractiveness of the equity market, relatively high yields in the fixed-income market continue to draw institutional funds, thus dampening the strength of inflows into equities.
“Some very strong stocks had become very overbought after April’s rally, leading investors to be more selective in deploying new capital.
“Also, there were lingering concerns about oil prices, geopolitical developments and the direction of global monetary policy that encouraged a more cautious approach among foreign investors,” he said.
The relative stability witnessed in the foreign exchange market and the increasing confidence in the ongoing economic reforms have further boosted investor sentiment, Eze observed.
He further said that demand for fundamentally strong companies was also helped by dividend-related positioning and corporate actions.
Eze looked ahead to a more optimistic market outlook for June and the second half of 2026, but warned of the potential for increased volatility.
He expects the market to stay bullish in June, but with investors more focused on sustainability of earnings rather than momentum buying.
He also expected periodic pullbacks after the substantial gains made in the first five months of the year.
Persistent exchange-rate stability may attract further foreign portfolio inflows.
Inflation moderating and possible monetary easing later in the year could boost equity valuations.
“There is expectation of strengthening of confidence in financial stocks by recapitalisation of banking sector.
‘Given the long-term return prospects, pension funds and institutional investors are likely to keep significant exposure to equities.
“But key risks are inflationary pressures, oil price volatility, possible weakness in corporate earnings and political positioning ahead of the 2027 election cycle,” he said.
On sectoral outlook, Eze said banking stocks were the major attraction of the market, with stronger capital bases, robust earnings potential, digital banking expansion and improved investor confidence after recapitalization efforts.
He also pointed out that consumer goods, industrial goods, insurance, energy and telecommunications stocks are expected to benefit from improving economic conditions, infrastructure spending, sector reforms as well as strong cash flow generation.
The same month recorded 18 trading sessions on the market, 11 of which were bullish and seven bearish.
Trading activities showed that investors exchanged 21.120 billion shares valued at N971.628 billion in 1,453,439 deals during the review period.
This was a gain from the 15.596 billion shares worth N848.972 billion transacted in 1,113,650 deals in April.
Among the major gainers, Guaranty Trust Holding Company rose from N135 to N137 while Ecobank Transnational Incorporated increased from N80.60 to N97.40.
First Holdco moved from N64.65 to N70 while United Bank for Africa went from N42.75 to N44.50.
Airtel Africa rose from N3,021.30 to N3,655.70, Eterna from N32.80 to N34.45, while Learn Africa gained from N9.30 to N12.75.
Berger Paints also gained significantly, moving from N81.75 to N147.60 during the month.
On the losers’ chart, Nigerian Aviation Handling Company dropped from N258 to N189.50, while Guinness Nigeria fell from N497 to N402.60.
Access Holdings dropped from N27 to N24.05, MTN Nigeria dropped from N915 to N820 while Aradel Holdings dropped from N2,024 to N1,933.80.
Also, the share prices of TotalEnergies Marketing Nigeria and Conoil remained unchanged at N640 and N194, respectively, through the month.
According to NAN, the Nigerian Stock Exchange (NSE) has announced that it will switch to a T+1 settlement cycle from Monday, June 1.