The government, at all levels, has been encouraged by experts to lower and, in some cases, completely eliminate taxes and levies imposed on manufacturers and firms.
They have added that while these taxes greatly burden entrepreneurs, they do not contribute significantly to the government’s revenue.
Speaking at this year’s economic outlook and budget analysis, which had as its theme “Building Economic Resilience in 2024: Strategies for a Sustainable Future,” Financial Derivatives Company Chief Executive Officer Bismarck Rewane stated that the economy is expected to grow at a rate of 3.3% this year after avoiding a recession the previous year.
He went on to say that while industries like natural gas and crude oil refining, textile and clothing, and financial institutions have all experienced modest growth above the national average, industries like construction, telecommunications, and financial institutions have experienced a recession.
An annual event called the “economic outlook and budget analysis” reviews significant policy actions and macroeconomic performance from the previous year and discusses the prognosis for the upcoming year, with a particular emphasis on possibilities and dangers.
Rewane discussed the main macroeconomic problems facing Nigeria, including the country’s subpar and inclusive growth, rising income inequality, high rates of unemployment and poverty, spiraling inflation, widening fiscal deficits, and escalating foreign exchange pressures.
This year, he recommended rescheduling debt, raising domestic interest rates, managing the money supply effectively, improving the foreign exchange market, implementing a cost- reflective power tariff, cutting back on gasoline subsidies, and reviewing wages, among other policy reforms that are necessary to save enterprises and the economy.
“The government needs to gain control over our foreign exchange and increase market transparency. How much of our foreign reserve actually exists? In addition, the government must gradually raise interest rates while lowering revenue and tax collection, which is opaque.
We have yet to see how the N8 trillion in savings from the removal of subsidies and revenue drive is being used for our advantage, notwithstanding the government’s claims. The economy needs to be freed from obstacles if it is to flourish since productivity is poor. There are no minor sectors of the economy, thus encouraging MSMEs would have a big impact and raise GDP,” the speaker stated.
Ben Akabueze, the director general of the Federation’s Budget Office, expressed sadness that the nation’s largest issue is trying to raise public revenue after three decades of operating a deficit budget financed by debt. “This cannot be the way we proceed.
The budget deficit for this year is around 3.88 percent of output, which increases inflationary pressures. Nigeria is not spending enough, despite our requests to reduce spending. It’s important to spend wisely rather than less.”
“Unfortunately, we will need to maintain a deficit budget for the time being. However, increasing revenue is the answer. Even though the budget has increased recently, there hasn’t been any discernible development in the sector as a result; therefore, the answer lies not in increasing budgetary funding but rather in improving the sector’s appeal to private sector involvement and investment,” the speaker stated.
Taiwo Oyedele, the chairman of the Presidential Fiscal Policy and Tax Reforms Committee, made a speech in which he predicted that rather than inflation being worse this year, systemic inefficiencies would need to be removed in order to lower the cost of necessities like food and petroleum products. He made his ideas public, urging the suspension of various taxes and levies, supporting the waiver of gasoline and LPG taxes, and promoting exports, particularly of services and intellectual property, which he claimed is a more attainable short-term objective than the sale of products.
“Additionally, we need to increase youth employment prospects in the digital space. In order to combat multifaceted poverty, the people should receive the N8 trillion that the government has saved. Helping small and tiny enterprises is where we need to start.”
“Divergent rates are a fundamental component of the FX issue that firms face. Ninety percent of the twenty billion remittances from the diaspora never reach Nigeria because fintechs receive dollars and credit recipients in naira. Since bringing in foreign exchange through the CBN will depreciate it, even exporters externalize their currency. To save our economy, we need to swiftly bring the official and illegal markets together,” he declared.
