Unless the government shelves its opulent lifestyles and obscene showmanship, there is no way it would be morally justified to ask Nigerians bearing the brunt of the hardship in Nigeria to continue to sacrifice, Organised Private Sector (OPS), has warned, insisting that the government must start shedding weight immediately to encourage the citizens to follow suit.
Particularly urging President Bola Tinubu to lead the way, they insist that he must ensure not only a substantial reduction in current spending of government officials on themselves and their households, but the entire gamut of wasteful spendings, arguing that no amount of increase in taxes would save the parlous state of the nation’s economy with the present lifestyle of those in power at various levels.
Decrying the current tax burden placed on industries and their employees, 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), said in Abuja during the closing session of the 2023 Nigeria Employers’ Summit, advocated reduction in taxes as one of the most effective ways to reduce the country’s current inflationary trend.
Obadimu, who spoke on the sidelines of the event, organised Nigeria Employers’ Consultative Association (NECA), argued that increasing taxes on industries and individuals would never address the government’s dwindling revenue, but instead, the focus must be on cutting governance expenses.
His words: 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.
“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.
To Ajayi-Kadir, who listed institutional, structural, and regulatory challenges associated with exports, a situation in which raw materials were exported rather than being handled by manufacturing industries to provide better employment opportunities for unemployed Nigerian youths, was very bad for economic growth.
Hear 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.”