NESG Flags Regulatory Overlaps, Legislative Weaknesses As Major Barriers To Growth

The Nigerian Economic Summit Group has identified regulatory overlaps and weak legislative frameworks as major constraints undermining Nigeria’s economic growth, warning that persistent structural and institutional gaps continue to weaken the country’s business environment.

This position was outlined in a newly launched baseline report by the Ernest Shonekan Centre of the NESG, developed in partnership with the Policy and Legal Advocacy Centre, with support from the UK’s Foreign, Commonwealth and Development Office.

Speaking at the launch, NESG board member, Nnanna Ude, said the report comes at a critical period for Nigeria’s economy, which has experienced alternating cycles of growth and constraint over the past decade.

He noted that economic growth has remained moderate at about three to four per cent in recent years, largely driven by the non-oil sector, even as macroeconomic pressures intensified.

According to him, inflation rose sharply in 2024, with food inflation exceeding 40 per cent at its peak, while the exchange rate recorded significant depreciation before showing signs of relative stability.

Ude added that although government revenue has expanded, particularly from non-oil sources, key challenges such as elevated public debt, infrastructure deficits, regulatory inefficiencies, and policy inconsistencies continue to constrain private sector activity and investment.

He stressed that recent reforms, including foreign exchange liberalisation, fuel subsidy removal, and tax adjustments, have not fully addressed these underlying structural issues. “Macroeconomic reforms alone are not sufficient without strong, coherent, and effective legislative and regulatory frameworks,” he said.

The report reinforced this position, identifying gaps within Nigeria’s legal and regulatory systems as a major source of inefficiency. It highlighted conflicting provisions across laws, overlapping mandates among regulatory agencies, weak enforcement capacity, and limitations in legislative processes as key impediments.

It cited regulatory fragmentation as a major concern, noting that multiple agencies often exercise similar or conflicting powers, thereby increasing compliance costs and creating uncertainty for investors.

The electricity sector was referenced as a clear example, where federal and state regulators sometimes issue overlapping directives.

Beyond regulatory challenges, the report observed that businesses continue to operate in a high-cost environment characterised by unreliable power supply, poor transport and logistics infrastructure, limited access to affordable finance, foreign exchange constraints, insecurity, and sustained inflationary pressures.

While acknowledging reforms introduced through initiatives such as the Presidential Enabling Business Environment Council and the Business Facilitation Act, the NESG said these efforts have improved administrative processes but have delivered only modest gains in addressing deeper structural bottlenecks.

To address these issues, the report called for urgent legislative action to eliminate regulatory overlaps, strengthen institutional coordination, and enhance legal clarity and consistency.

It also recommended improving transparency and inclusiveness in the legislative process, prioritising executive-sponsored bills to ensure policy coherence, and strengthening the capacity of regulatory agencies through better funding and training.

Ude emphasised that without addressing these legal and institutional gaps, reforms would continue to yield limited results, leaving Nigeria’s economic potential constrained.

The NESG believes that aligning legislative reforms with macroeconomic policies is essential to creating a more predictable, competitive, and investor-friendly business environment capable of driving sustainable growth.