Nigeria’s Private Sector Faced Unsatisfactory Economic Performance Under Tinubu In 2024, Says NACCIMA
In a statement, the National President of NACCIMA, Dele Kelvin Oye Esq., said all data, metrics and statistics have confirmed that the Nigerian private sector bore fully, the negative burdens of the nation’s current economic reforms, facing very harsh conditions including high inflation, increased borrowing costs, and currency devaluation.
The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has said the 2024 economic performance was unsatisfactory for the private sector, calling for economic reforms to address imbalances threatening the private sector in the country.
In a statement, the National President of NACCIMA, Dele Kelvin Oye Esq., said all data, metrics and statistics have confirmed that the Nigerian private sector bore fully, the negative burdens of the nation’s current economic reforms, facing very harsh conditions including high inflation, increased borrowing costs, and currency devaluation.
Oye, who emphasized the urgent need for reforms to avert further economic strain on the private sector as the New Year begins, noted that Nigeria is a country with huge potential, innovative private sector minds, capital and opportunities, and deserves a listening economic team and team players who must recognize the private sector as stakeholders.
He lamented the challenges faced by the private sector as a result of the policies of President Bola Tinubu.
He said, “We should agree that the 2024 economic performance was unsatisfactory for the private sector. All data, metrics and consequent statistics confirm that the Nigerian private sector has borne fully, the negative burdens of the current economic reforms.
“While in contrast, the Nigerian public sector continues to thrive and expand. All economic benefits of the recent economic reforms have been translated to the public sector through high capital transfers and revenues. The private sector faced higher inflation, higher cost of borrowing/repayment for existing loans, the 2.4 billion USD CBN unpaid forwards, currency devaluation and higher costs in all sectors of the economy.
“This continued imbalance caused by increased public sector expenditure has destroyed value in the private sector due to excessive fiscal deficits which are financed through government borrowing at very high unsustainable interest rates.
“We are therefore making recommendations and suggestions that may be considered in the short to medium term.”
He continued: “Fiscal deficits arise when public sector expenditure exceeds public sector income. The funding of these fiscal deficits through borrowing results in high interest rates and high inflation.
“The solution to high interest rates and high inflation is for the public sector to spend less and to start becoming an efficient productive unit.”
It urged the government to “undertake a rigorous review of its current size and expenditure to identify and eliminate wasteful spending”.
It said, “Efficient allocation of existing resources can help reduce excessive borrowing.
“Other countries like Argentina have made political choices to eliminate recurrent budget deficits. The Nigerian budget for elected and unelected politicians can be adjusted.
“The size and number of government funded agencies can be reduced and taxes should be further reduced which will attract greater private sector investment.
“The government should create an environment where the private sector can take the lead in economic ventures. This includes deregulation in most areas, reducing bureaucratic red tape, and enhancing ease of doing business in Nigeria. (Regulatory Agencies like Standards Organisation, NAFDAC etc can be reformed to adopt internationally acceptable standards for Nigeria.)”
On the 2024 Tax Bill, Oye said the “current media engagement between federal and state governments in newspaper and press releases only further confirms the disconnect described above. The beneficiary parties receiving tax payer funds engage each other on how to secure a larger portion of tax payer funds without consideration for the public or tax payer interest.
“We believe corporate taxes should be further reduced to 19% and VAT pegged at 7.5%. We believe this will grow the economy and result in higher tax revenues for the government. As a caveat to protect government revenues, each tax payer must not pay less than the preceding tax year.”
According to him, “Significant tax payers like the telecommunications sector who require reforms; which will result in increased tax revenues should not be ignored. There must be real dialogue with genuine concessions to be made by all parties.”
