Members of the organised private sector have urged President Bola Tinubu to reduce current spending, particularly on former governors, their first ladies, and other political office holders in the country.
They also stated that it was critical for the Tinubu-led federal government to consider reducing the current tax burden placed on industries and their employees, as this would be one of the most effective ways to reduce the country’s current inflationary trend.
Mr Sola Obadimu, Director-General of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), and Segun Ajayi-Kadir, Director-General of the Manufacturers’ Association of Nigeria (MAN), stated these in Abuja during the closing session of the 2023 Nigeria Employers’ Summit.
The Nigeria Employers’ Consultative Association (NECA) organised the summit.
In an interview with journalists on the sidelines of the summit’s closing session, Obadimu stated that increasing taxes on industries and individuals cannot address the government’s dwindling revenue and that only cutting governance expenses can.
You see, the point is, the government is being gradually pushed to the wall. I don’t think that rather than taxing people and taxing industries, the government also has to look at the area of leakages. The cost of running a government is still so high.
Ordinary a local government will be moving with six cars in his convoy, and this supposedly high cost of petrol. That is different from offices of the first ladies of governors, and offices of past governors.
If you see the amount we are spending in maintaining former governors who are no longer in office – the cost of current expenditure is so high, and I think our current political players need to manage that area.
They cannot continue to maintain the same lifestyle while expecting people and industries to continue to pay to maintain that lifestyle, he said.
According to him, industries would continue to pass the burden to consumers if they continue to pay high taxes.
If you watch the government in recent times, the government is looking for money. Unfortunately, maybe because of the dwindling revenue arising from oil theft because we have solely depended on crude oil which we are not adding any value to.
But in the desperation of the government, they keep on increasing taxes on members of the organised private sector, and that is where the problem is. You can’t keep on increasing taxes for ever, and that worsens inflation because you cannot sell below your production cost.
If inputs’ costs go up, people would keep on increasing their prices and it is pushed to the consumers. For the first time, the fortunes of Nigerian Breweries Limited are taking a nosedive. What has caused this is inappropriate policies around cash and currency circulation that took place early in the year.
Segun Ajayi-Kadir, MAN’s DG, listed institutional, structural, and regulatory challenges associated with exports.
He criticised a situation in which raw materials are exported rather than being handled by manufacturing industries to provide better employment opportunities for unemployed Nigerian youths.
According to him;
A lot has to be done to promote exports. In manufacturing for instance, you need to be competitive before you can venture into export, and there are those constraints that have limited manufacturing performance which has made it rather difficult to successfully export.
All that it takes for you to export is not just for you to get your goods across the border but to ensure that when your goods get across to the foreign shelves is not left there and people actually buy them. The challenges that have been institutional, some of them are structural, some of them have to do with regulations.
At the same time, it has to do with infrastructural challenges that have made manufacturing performance remain low. You know our contribution to the GDP has been hovering around 9% or 10%. In that kind of situation, it means we operate in a high cost environment.