The Nigeria Employers’ Consultative Association (NECA) has said that businesses across the country are yet to fully benefit from 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 appraising the administration’s economic performance.
Oyerinde said the removal of fuel subsidy and liberalisation of the foreign exchange market were steps that reflected government’s commitment to market-driven economic policies and improved transparency across sectors.
The reforms had improved fuel availability, cut recurring supply interruptions and sent a signal of policy consistency to local and foreign investors, he said.
There were indications of increased investor confidence but many domestic businesses, particularly Micro, Small and Medium Enterprises (MSMEs), were still struggling with operational challenges, he said.
He said depreciation of the naira had raised production costs, impacted competitiveness and increased operational risks for many businesses.
“Many private sector players are yet to witness the expected benefits of the reforms as they continue to battle with inflation, energy costs and exchange rate volatility,” he said.
“Declining purchasing power of consumers and the rising cost of production have put pressure on businesses, and some firms are adjusting their investment plans and operations based on the prevailing economic conditions,” Oyerinde said.
On infrastructure and refining, Oyerinde said developments in housing, industrial investments and local petroleum refining had created opportunities and contributed to an improved fuel supply.
But he said power supply was a major challenge for businesses, citing persistent grid instability and reliance on alternative energy sources.
“Despite the ongoing reforms in the power sector, the number one constraint to business productivity and competitiveness across the country is the insufficient electricity supply,” he said.
Oyerinde said that 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 employers were cautious about large-scale recruitment amid high borrowing costs, foreign exchange volatility and rising operating expenses.
He believes sustainable job creation will depend on deeper structural reforms that reduce the cost of doing business and improve access to affordable finance.
He urged 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 increased investment in technical and vocational education, digital skills acquisition and stronger public and private sector partnerships to enhance 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.
Banking, consumer stocks boost N4.5trn market gain in May
Meanwhile, the equities market continued to enjoy positive momentum in May as investors gained N4.514 trillion as renewed buying interest in financial services and consumer goods stocks lifted overall market performance.
The market capitalisation appreciated by 2.89 per cent to close at N160.508 trillion in May, compared to N155.994 trillion recorded at the beginning of the month.
Similarly, the All-Share Index (ASI) went up 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.
However, the performance fell short of the remarkable rally recorded in April when investors posted gains of N26.185 trillion.
The market rally in May was driven by gains in financial services, consumer goods and selected industrial stocks.
Speaking with the News Agency of Nigeria (NAN) in Lagos on Sunday, Dr Bennett Eze, Head of Research and Development, Chartered Institute of Stockbrokers, said the performance was a reflection of a more cautious and selective investment environment.
Eze said the slower growth recorded in May was largely due to profit-taking by investors after the historic rally witnessed in April.
“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,” he said.
“Slower growth in the market in May could also be related to rotation into fixed income instruments, valuation concerns and global uncertainties.
“Although the equity market is attractive, the relatively high yields in the fixed income market are still attracting institutional funds, which dampens the strength of inflows into equities.
“Some very strong stocks became very overbought after April’s rally, which led investors to be more selective in deploying new capital.
“Also, lingering concerns about oil prices, geopolitical developments and the direction of global monetary policy encouraged a more cautious approach among foreign investors,” he said.
The relative stability seen in the foreign exchange market and the growing confidence in the ongoing economic reforms have further bolstered investor confidence, Eze said.
Dividend-related positioning and corporate actions also helped demand for fundamentally strong companies, he added.
Eze looked ahead to a more optimistic market outlook for June and the second half of 2026, but warned of the potential for more volatility.
He expected the market to remain 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 fell from N27 to N24.05, MTN Nigeria fell from N915 to N820, while Aradel Holdings fell from N2,024 to N1,933.80.
Similarly, the share prices of TotalEnergies Marketing Nigeria and Conoil closed flat at N640 and N194, respectively, throughout the month.
The Nigerian Stock Exchange (NSE) has announced that it will switch to a T+1 settlement cycle from Monday, June 1, according to NAN.
