The Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) has called on the Federal Government to develop effective strategies for managing the country’s debt profile to prevent a potential economic shutdown. During a press briefing in Lagos on Monday, NACCIMA President John Udeagbala expressed concern over Nigeria’s alarming situation, particularly the decision to borrow N11.34 trillion to finance over 50 percent of the 2023 budget. As a leading member of the Organized Private Sector, NACCIMA advocates for reduced reliance on debt financing due to its detrimental effects on the economy.
Udeagbala further highlighted NACCIMA’s apprehension regarding the recently passed Finance Bill 2022 by the Senate, which he believes could hinder the growth and development of private businesses. He pointed out that the bill imposes additional financial burdens on sectors that are already struggling to remain viable. He stated, “Scarcity of foreign currency, a poor business environment, and high energy costs are significant challenges for businesses, particularly within the organized private sector. Any further tax increases could lead to the closure of many companies and exacerbate the existing unemployment crisis in the country.”
He noted that it has been less than two years since the government raised the education tax from two percent to 2.5 percent, and now it is set to increase to three percent. Additionally, the Value Added Tax (VAT) has risen from five percent to 7.5 percent during the same period. Udeagbala emphasized that there are over 50 other forms of taxes and levies imposed on the Organized Private Sector by federal, state, and local governments. He also mentioned that there are additional tax bills currently in the National Assembly that seek to impose further taxes and levies on businesses, including the NITDA levy, the National Social Insurance Trust Fund, and Company Income Tax, amidst the various challenges faced by the sector.
Regarding the upcoming General Elections, Udeagbala expressed concern about the impact of political dynamics on the economy. He stressed the importance of organizing a free and fair election, as this would enhance Nigeria’s standing among other nations and attract more foreign direct investment. He noted a troubling trend where Nigeria’s presidential candidates frequently discuss the country’s political economy at Chatham House in London rather than engaging with the Organized Private Sector domestically. “The OPSN and the Nigerian people are the ones who endure the economic hardships in Nigeria, so why discuss domestic challenges abroad?” Udeagbala questioned. He called for the establishment of a similar institution in Nigeria to address socio-economic challenges and propose local solutions.
Finally, the chamber expressed concern over the declining GDP growth rate, which has been falling quarter by quarter since reaching 5.01 percent in the second quarter of 2021. Udeagbala warned that this trend indicates a contraction in economic activities and the demise of businesses. He stated, “The private sector has suffered significant losses due to the lack of turnaround targets for the basic needs of businesses in Nigeria.”
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