Economists Urge FG to Prioritise Agriculture, Reduce Production Costs to Improve Living Standards

Two Nigerian economists, Prof. Ken Ife and Mr. Eze Ubiji, have urged the Federal Government to prioritise agricultural development, reduce domestic production costs, and improve access to affordable finance to ensure that economic reforms translate into better living standards for Nigerians.

The economists made the call in separate interviews on Sunday in Lagos, stressing the need for targeted investments in agriculture, reliable electricity supply, affordable credit, and critical infrastructure.

They maintained that Nigeria's macroeconomic gains would have a greater impact on households if accompanied by policies aimed at reducing production costs and improving the affordability of essential goods and services.

Ife, President of the Institute of Professional Economist and Policy Management, acknowledged the progress achieved through the Federal Government's macroeconomic reforms, noting that international financial institutions and credit rating agencies had recognised the improvements.

However, he expressed concern that the reported economic gains had yet to produce meaningful improvements in the living conditions of ordinary Nigerians.

“However, the gains from the economic reforms are yet to reflect in our living standards,” he said.

Ife urged the government to address food insecurity by tackling agricultural production challenges, reducing post-harvest losses, and improving the transportation of farm produce.

According to him, Nigeria possesses substantial agricultural production capacity, but inadequate mechanisation, poor farming practices, and insufficient storage and transportation infrastructure continue to undermine productivity.

He identified cassava, yam, plantain, and cocoyam as some of the country's major food crops affected by post-harvest losses.

Ife claimed that Nigeria produced more than 200 million metric tonnes of food, but over 50 percent was wasted because of inadequate preservation facilities, inefficient agricultural practices, and transportation challenges.

He attributed the losses partly to limited mechanisation, which restricts agricultural productivity, and the absence of efficient logistics systems for transporting produce from farms to markets.

The economist also identified Nigeria's inadequate railway network as a major obstacle to reducing the cost of transporting agricultural produce.

According to him, rail transport accounts for approximately five percent of agricultural produce movement, leaving road transport to handle most of the distribution.

He argued that expanding the railway network would reduce transport costs, minimise post-harvest losses, and improve food availability in domestic markets.

Ife also expressed concern over rising diesel prices, describing them as a major challenge for domestic manufacturers, particularly producers of fast-moving consumer goods (FMCGs).

He explained that high energy and operating costs were weakening manufacturers' ability to produce goods at affordable prices, consequently reducing household purchasing power.

The economist called on the Federal Government to take advantage of increased crude oil earnings to ease the financial burden on domestic producers.

“Since the country is earning more from increased crude oil prices, the government should offset its about 3.3 billion dollar loans from the African Export-Import Bank (Afreximbank),” he said.

Ife argued that settling the loans would create opportunities for the government to supply crude oil to domestic refineries at subsidised rates.

“Then the government is free to supply adequate crude to local refineries at a more subsidised rate to ameliorate the cost of domestic production and check the economic hardship,” he added.

He maintained that cheaper energy, improved agricultural logistics, and efficient transport systems would enable businesses to reduce operating costs and make essential commodities more affordable to Nigerians.

Meanwhile, Ubiji, Executive Secretary of the National Association of Small and Medium Enterprises (NASME), identified access to affordable finance as essential to strengthening Nigeria's small-business sector.

He said credit facilities offered on favourable terms would enable small and medium-sized enterprises (SMEs) to sustain operations, expand production, and contribute more effectively to national economic growth.

“The government should replicate its economic prosperity through disbursing credit facilities at a long-term moratorium to help the SME sector,” Ubiji said.

He explained that many SMEs had experienced significant financial difficulties following the implementation of the government's economic reforms.

“Considering that most SMEs have been grappling with the economic hardship caused by government reforms, affordable financing is essential,” he said.

Ubiji stressed that government-backed credit schemes should provide businesses with sufficient time to stabilise their operations before repayment obligations commence.

According to him, access to affordable finance would help entrepreneurs manage operating expenses, invest in productive activities, and sustain their businesses despite prevailing economic pressures.

The NASME executive also called for urgent improvements to critical infrastructure, particularly electricity supply, to reduce the cost of doing business.

He urged the government to ensure that electricity was both reliable and affordable in SME clusters across the country.

“Government should ensure electricity is more available and affordable in most SME clusters across the country.

“This will enable the sector to operate at a lower cost and contribute adequately to the country's economic growth,” Ubiji said.

He explained that addressing infrastructure deficiencies and financing constraints would strengthen the capacity of SMEs to create employment opportunities, increase domestic production, and support sustainable economic development.

The economists' recommendations highlight the need for complementary economic policies to ensure that macroeconomic reforms deliver measurable benefits to businesses and households.

While Ife emphasised agricultural productivity, food preservation, efficient transport, and affordable energy, Ubiji focused on improving access to credit and strengthening infrastructure for small businesses.

Both maintained that reducing production costs would improve business efficiency, increase the affordability of goods and services, and enhance living standards.

President Bola Tinubu had recently declared that Nigeria had entered a new phase of economic development, describing the country's transition as a movement from reform towards prosperity.

In his Independence Anniversary address, Tinubu said “the age of reform has done its work," and that “now begins the age of prosperity”.

The President maintained that Nigeria was approaching the next phase of economic development “from a position of strength," citing what he described as improvements in the economy's fundamental direction.

He said his administration had taken difficult decisions and established the foundations for sustainable economic prosperity.

However, the economists emphasised that the benefits of macroeconomic reforms must translate into reduced production costs, stronger businesses, improved food security, and better living conditions for Nigerians.