According to the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture and the Organised Private Sector of Nigeria, the country’s massive public sector deficit is the largest threat to the federal government’s objective of turning Nigeria into a $1 trillion economy by 2030.
“The Federal Government must adopt and implement a more rigorous public financial management strategy,” said NACCIMA President Dele Oye.
He emphasised the importance of prioritising capital over recurring spending, aggressively expanding the tax base instead of raising tax rates, improving expenditure efficiency, and plugging leaks across all levels of government.
“We urge the Federal Government to implement rigorous public financial management by: prioritising capital over recurrent spending; aggressively expanding the tax base rather than raising tax rates; improving expenditure efficiency and plugging leakages, and accelerating the sale or concessioning of underperforming public assets.”
He noted that these are critical to restoring macroeconomic stability and investor and business confidence.
He also commended the Federal Government, represented by the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, and the Central Bank of Nigeria Governor, Mr Olayemi Cardoso, for their candor in acknowledging the formidable macroeconomic and social challenges currently confronting the nation, as reiterated at the just concluded IMF/World Bank Spring Meetings.
The NACCIMA boss further applauded the government’s willingness to collaborate with development partners on job creation and youth empowerment, describing it as timely and commendable.
He said, “We recognise the government’s laudable commitment to single-digit inflation, job creation, digital infrastructure development, and the ambition to transition to a $1tn economy by 2030.”
He, however, noted that the recently released Africa Pulse report by the World Bank is a stark reminder of the urgent threat of deepening poverty in Nigeria, with the national poverty rate projected to surge to 56 per cent by 2027.
“The dramatic growth in the number of Nigerians living below the poverty line, surging inflation, youth migration, and the expanded fiscal deficit underscore the need for even faster, targeted, and pragmatic policy action,” the private sector chairman stated.
On key areas of concern and recommendations, Oye stated, “The central bank’s prevailing monetary stance, with commercial lending rates hovering at 30-40 per cent, risks stifling entrepreneurship, industrial production, and agricultural expansion.
“The central bank’s current monetary stance, with commercial lending rates hovering at 30-40%, risks stifling entrepreneurship, industrial production, and agricultural expansion,” Oye said while discussing the main areas of worry and solutions.
Despite aiming to combat inflation, this lending climate ironically imprisons the productive sector and stifles the private sector’s ability to innovate and create jobs. Therefore, NACCIMA advocates specific intervention funds and special loan windows for MSMEs and strategic sectors at discounted rates to promote growth, employment, and food security.
Regarding youth migration and insecurity, the chairman of OPSN pointed out that the departure of skilled young people (Japa) is a concerning trend caused by insecurity and economic disenfranchisement.
Source: Punch
Image Credit: FreePik
