The Center for the Promotion of Private Enterprise (CPPE) and the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) have bemoaned the appalling situation of the economy, highlighting how all sectors are fighting valiantly to stay afloat.
Ide John Udeagbala, president of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA), said the situation has grown alarming and urged governments at all levels to develop effective strategies to strengthen and stabilize the economy immediately.
Speaking at the year’s second socioeconomic media briefing in Lagos, he expressed regret that nothing has changed since their first quarter press briefing, when they expressed deep concern over the harsh socioeconomic conditions in the nation and proposed solutions to the government.
Instead, he claimed, things have become worse and the authority has done nothing to address the numerous problems brought up.
Udeagbala stated that despite the government’s lack of response, they would continue to address the issues until a business environment that is favorable to economic growth and inclusive development is attained.
He urged the Federal Government to fix the nation’s four refineries right away, saying that doing so would help create jobs for young people and put a halt to the importation of petroleum products into the nation.
“It will also address the impact of fuel subsidy removal without adding additional debt burden on the nation. Besides, our ability to provide some basic raw materials internally will help our industries compete better to benefit from the African Continental Free Trade Agreement (AfCFTA),” he stated.
For his part, Dr. Muda Yusuf, director of the Centre for the Promotion of Private Enterprise (CPPE), claimed that some tax and import duty provisions in the fiscal policy measures for 2023 would have a substantial negative impact on the economy and exacerbate concerns about deindustrialization.
He claimed that some of the proposals could increase inflationary pressures, which are harmful to the manufacturing, building, and transportation sectors as well as economic growth.
Yusuf emphasized that having to deal with a system of high import duties and onerous tax rates while the value of their currency is falling is trouble for economic participants on two fronts.
According to him, fiscal policy actions must aim to strike a healthy balance between raising revenue, expanding domestic production, enhancing citizen welfare, fostering economic growth, extending economic inclusion, supporting job creation, and taking into account societal ethos, beliefs, and values.
While excise duty seeks to increase taxes on beverages, drinks, wines, fruit juice, energy drinks, and spirits, Yusuf stated that the implications of this would be a decrease in sales for investors in the sector, affect tax revenue, a loss of direct and indirect jobs, a possibility of job loss for millions of farmers who supply local inputs like grains, risk of declining profitability and shareholder value, and increased risks of smuggling.
The cost of locally assembled vehicles is far beyond the means of the majority of Nigerians, he continued, and the economy has experienced significant exchange rate depreciation, which had already increased the cost of vehicle acquisition in the first place.
He also said that transportation expenses and auto smuggling will skyrocket.
He lamented the 45 percent import tax imposed on iron and steel items, claiming that it would simply raise the cost of building homes, increase the chance of a building collapsing, encourage the smuggling of iron and steel products, and undermine the already suffering construction sector.
“With a 30 per cent Ad Valorem tax and a specific tax of N75/litre, most wine industries operating in the country may have to shut down. The immediate risk is that the domestic wine market would be taken over by imported and mostly smuggled wines. Tax on tobacco was also increased and the risk is that the cigarette market would be completely taken over by smuggled tobacco products, which are completely outside the radar of regulatory and revenue authorities.”
Udeagbala expressed regret that the Ease of Doing Business (EoDB) remains a mirage despite numerous promises from the current administration. He added that multiple taxes and exchange rates, government policy reversals, subpar infrastructure, and a high cost of electricity, among other factors, continue to obstruct business opportunities and scare away investors.
“NACCIMA as the voice of the Organised Private Sector in Nigeria (OPSN) calls on the government to consider these impending factors affecting EoDB and implement the various solutions we have suggested in the past for lasting solutions to these myriads of challenges.”
“Collaboration with the OPSN and implementations of suggested solutions to these challenges will help ginger the economy back to inclusive growth and development.”
The recent constitutional amendment on power generation, which permits state governments to create laws for the generation, transmission, and distribution of electricity to areas not serviced by the national grid system in states, he claimed, has paved the way for the transformation of the power sector in Nigeria. He called for the decentralization of power.
A poor power supply and high energy costs, he continued, are killing enterprises and creativity in Nigeria, which has the biggest energy access deficit in the world with over 85 million people lacking connection to the national grid.
NACCIMA advised the government to use the opportunity presented by the scheduled census to increase the tax base across the nation rather than raising tax rates and burdening an already overburdened few people and OPSN businesses with more fees.
“OPSN is worried about the several issues, which has remained as constraints to the growth of the sector, including poor infrastructure, weak regulatory framework and institutions, lack of oversight, lack of best practices and lack of data. The rising wave of cybercrime globally and its attendant negative consequences has continued to call for the attention of well-meaning Nigerians to help curb cybercrime. As technology continues to advance, novel methods are used to perpetrate cyber related crimes and Nigeria is not immune to these attacks.”
