₦airaland Forum

The Nigeria Employers’ Consultative Association (NECA) believes that the Federal Government will be leaving a legacy of multiple taxes, unemployment, high inflation, debt burden, economic crisis for the incoming government. It says that these will constitute big challenges for the next government. TOBA AGBOOLA reports.

As the nation struggled to recover from the COVID-19 pandemic, which inflicted leadership and sustainability challenges across the globe, businesses were forced to operate under a very tight and unfavourable environment, made worse by systemic contradictions.

The Nigeria Employers’ Consultative Association (NECA) said while last year was a terrible for business, things might not change in the year.

In his review of last year and expectation for the year, the Director-General of NECA, Mr Wale-Smatt Oyerinde, said the Russia-Ukraine war changed the narratives from recovery from the COVID-19 effects to sustainability, in view of the consequential effects of the war. He said the needless war caused a major increase in the cost of energy across the world, with Europe greatly affected.

The war, according to NECA, also heightened the disruption in global value chain, which further compromised business sustainability. The impact of the war on energy and food distribution remained a concern for not only businesses but also global leaders.

Furthermore, NECA said the withdrawal of liquidity in the world economy prompted the increase in interest rates and the consequential effect on nations with high debts, including Nigeria. It could be adduced that the war had further deepened the level of poverty and caused a spike in inflation rate, Oyerinde said.

2023 Budget

NECA expressed concerns over the 2023 National Budget, saying poverty, unemployment, rising debt profile, and others were not likely to change as President Muhammadu Buhari signs the N9.73 trillion Appropriation Bill to Law.

The umbrella body for employers and voice of the business community said it was imperative for the government to mobilise and strengthen revenue sources to avoid financing the budget through high-interest-rate borrowing, thus increasing future debt service.The “Budget of Fiscal Sustainability and Transition” was designed to achieve, among other things, the strategic objectives of the National Development Plan 2021–2025.

“With estimated N9.73 trillion and N21.83 trillion budgeted as revenue and expenditure and a fiscal deficit provision of N12.1 trillion, the budget is ambitious while there are concerns about its basic fundamentals. The ‘rushed’ passage of the budget by the National Assembly calls for concern as this could not have enabled the wide consultation of critical stakeholders whose input would have added value to the budget proposal,’’ Oyerinde said.


Oil price

The US$75 per barrel oil price assumption for the year looks realistic, given that the commodity averaged $99pb in 2022 even as OPEC+ remains fixated on regulating oil production to stabilise energy prices.

However, global recession fears in 2023 could dampen oil demand with an adverse effect on prices. The oil production benchmark of 1.69 million/barrels per day also seems somewhat ambitious.

The combination of factors such as large-scale oil theft, frequent shut-ins, vandalism, and International Oil Companies’ (IOCs’) divestment have continued to depress oil production in 2022.

Other challenges hindering businesses to create jobs

NECA said it would not be out of place to say that this government would be leaving a legacy of taxes, levies and fees for the Organised Private Sector (OPS).

”The quantum and rate of taxing organised businesses has been quite unprecedented in the last few years.

“At the last count, organised businesses were made to pay over 50 various taxes, levies and fees (both legally and illegally). To further burden the already over-burdened organised businesses, the National Assembly passed the Finance Bill, increasing the Tertiary Education Tax (TET) rate from 2.5 per cent to three per cent. It is worrisome that an increase was implemented in 2021 through the Finance Act 2021.

“This singular increase effectively raised the Corporate Income Tax (CIT) to about 36 per cent, which undoubtedly, comparatively, is one of the highest rates in the world. All these not only created enormous challenges for businesses, they also hindered them from maximising their full capacity to create jobs and wealth.

“As we progress into the year, the outgoing government must all within its powers to ensure some level of stability in the polity. The efforts at reducing oil theft should be stepped up. The government must take a second look at the challenges of the multiplicity of taxes and the introduction of new ones. It will be counter-productive to continue to increase taxes and invariably burden many businesses out of existence. While we cannot control global events that affect us, we can do well to resolve the many contradictions inherent in our polity. In 2023, the ripple effects of the Russia-Ukraine war will continue to be felt as global fiscal tightening will continue with consequential effects on Nigeria and other struggling economies.

“Energy challenges will continue in Europe with Russia weaponising gas and food supply. [b]The removal of fuel subsidy in Nigeria could trigger protest from organised labour even as the purchasing power of average Nigerians continue to dwindle due to increasing inflation and high unemployment rate. [/b]It is also expected that businesses will face more challenges as the quest for sustainability and not competitiveness continues.

“The incoming government must be bipartisan and decisive in addressing the myriad of challenges that stifle the growth of businesses and, invariably, national development. The challenges are huge, but with the right policies and people at the helm of various Ministries, Departments and Agencies (MDAs) and with collaboration with the OPS in policy design, implementation and monitoring, these challenges are surmountable.

“With the National Bureau of Statistics reporting over 33.3 per cent unemployment rate and over 63 per cent of persons living within Nigeria, and about 133 million people multi-dimensionally poor, the best that any government can do is to facilitate a favourable environment for businesses to thrive.”

Subsidy scam

NECA charged the Federal Government to unravel the scam surrounding fuel subsidy and unveil a plan to remove it.

“It was distressing to witness long queues in filling stations across the country when the government claimed to have paid trillions in petrol subsidy.

“The government has to stop making a mockery of the country and the citizens. Notwithstanding the subsidy payment, Nigerians are still compelled to endure long queues to buy it at almost a black market rate, fuelling inflation and economic hardship.”

Issues of concerns in 2023

Oyerinde continued: “As we progress in year, it is imperative that the outgoing government does all within its powers to ensure some level of stability in the polity. The efforts at reducing oil theft should be stepped up. It is important that the government should take a second look at the challenges of the multiplicity of taxes and introduction of new ones. It will be counter-productive to continue to increase taxes and invariably burden many businesses out of existence. While we cannot control global events that affect us, we can do well to resolve the many contradictions inherent in our polity.

“In 2023, the ripple effects of the Russia-Ukraine war will continue to be felt, global money tightening will continue with consequential effects on Nigeria and other struggling economies, energy challenges will continue in Europe with Russia weaponising gas and food supply, the removal of fuel subsidy in Nigeria could trigger protest from organised labour even as the purchasing power of average Nigerians continue to dwindle due to increasing inflation and high unemployment rate. It is also expected that businesses will face more challenges as the quest for sustainability and not competitiveness continues.”

Ways out

Oyerinde added: “On policy recommendations for the incoming government, we propose that the incoming government must demonstrate strong political will and nationalistic zeal to not only unravel the misery surrounding the fuel subsidy, on which over N4 trillion was expended in 2022, but also name and prosecute those found to have deprived the nation of huge developmental funds.

“The next government’s priorities should include ensuring macroeconomic growth and stability; getting the nation’s refineries to work and removal of the fuel subsidy; ensure a fair and just system of taxation, which must include the harmonisation of taxes across the Federation; alignment of the Fiscal, Monetary and Trade policies to stimulate growth and increase investor’s confidence; review the national security architecture as this will have a ripple effect from a reduction in the loss of lives, high cost of transportation, food inflation, among others.

“It was reported that one of the Electricity Distribution Companies lost over N30billion to vandalism, give more attention to trade and non-oil exports as alternative for Foreign Exchange earnings, develop a more robust monetary policy to defend and increase the value of the Naira, be deliberate in creating plans to reduce the bourgeoning debt profile; facilitate a more conducive environment for businesses and ensure an all-inclusive growth across sectors.

“While it is obvious that the road ahead will not be easy, it is expected that the government will refocus at ensuring economic stability and create a foundation for economic renaissance, post-May 2023.

“Structurally, the nation is dealing with a multi-facet economic challenge and lack of competitiveness in our manufacturing industry. As we deepen our participation in the Africa Continental Free Trade Area Agreement (AfCFTA), we cannot, but enable the real sector of the economy to stabilise to be able to compete at the African trade market. Not doing so will sound the death knell for Nigerian businesses and expose the economy to dire consequences. The incoming government must be bipartisan and decisive in addressing the myriad of challenges that presently stifle the growth of businesses, and invariably national development.

“The challenges are huge, but with the right policies and people at the helm of different Ministries, Departments and Agencies, and with close collaboration and partnership with the OPS in policy design, implementation and monitoring, these challenges are surmountable.”

https://thenationonlineng.net/brace-up-for-inflation-unemployment-debt-burden/

https://nation-media-assets.storage.googleapis.com/wp-content/uploads/2022/07/25041540/Nigerias-inflationary-trend-movement-in-2022.png

God will give us the strength to scale through the huddle

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I laugh most times when I hear people make statements like "Buhari took this country 20 years backward", Buhari took this country 40 years backward". The fact is that this country has never been in this state since the country was formed. PMB and his gang totally murdered the country in cold blood and it is a big lesson that people like PMB should never be allowed near the seat of power. This country doesn't need an election now, it needs a strong interim government that will suspend the Constitution and sanitise the system before handing over to a good civilian administration. If we proceed with elections, the defective system will keep producing the same set of people that have been killing the country

This is why we need expert in crises management to handle the affairs of the country.
Nigerians call and asiwaju answers.
Nigeria must be great.

Buhari’s undoing is his wonted predilection for hierarchising ethnicity, religion and loyalty above competence. Since 1999, no president has obtrusively shown a more nepotistic aspect than Buhari.

It is unarguable that the president arrays the most competence-challenged cabinet ever in the chronicle of governance in Nigeria.Yes,a recession cabinet.

Buhari is the only Nigerian president that has presided over the country under multiple recessions. As it was in 1984 under General Buhari, so it is in 2016 and 2020 under President Buhari.

https://www.thecable.ng/buharis-legacy-of-recessions/amp

The senseless, clueless, impactless and directionless government class of 2015 - 2023 ably led by the nformous dullard of 1984-85 and their zombies must be all be pleased with what they have enmeshed Nigeria and Nigerians into.

Holla911:
This is why we need expert in crises management to handle the affairs of the country.
Nigerians call and asiwaju answers.
Nigeria must be great.

LMAO Bold of you to think that a deadbeat Tinubu would do what a combination of Fashola, Osibanjo, Fayemi, and every damn person he "made" couldn't do

I am perplexed about the country situation right now,

Holla911:
This is why we need expert in crises management to handle the affairs of the country.
Nigerians call and asiwaju answers.
Nigeria must be great.

Apart from village meeting.

Can u allow a 90years old man to run a tech company in this age. Asiwaju is an old school. He is pretty behind in everything.

During his time as Governor,he was not among the best performing governor. He was totally not in the ranks of governors who did well.

So,how do anyone think he has the magic wand to change the country when most youths in Lagos have all turned to Street cultists and agbero of all sorts.

Acidosis:
LMAO Bold of you to think that a deadbeat Tinubu would do what a combination of Fashola, Osibanjo, Fayemi, and every damn person he "made" couldn't do

If Tinubu is deadbeat.... what of your pops who's no where close to the excreta of the so called deadbeat?

Like it or not, BAT'S poopoo is greater than your entire lineage past, present and future COMBINED.

The hard truth is better but deep down you know I am right.

Yet some people are still supporting the party that made Nigeria the poverty capital of the world

Often times I asked myself if these guys have brain

Lol. So the suffering has not even started

Don't ever expect things to get better, learn to adapt: life is not for the faint hearted.

Some thoughts

“

The next government’s priorities should include ensuring macroeconomic growth and stability; getting the nation’s refineries to work and removal of the fuel subsidy; ensure a fair and just system of taxation, which must include the harmonisation of taxes across the Federation; alignment of the Fiscal, Monetary and Trade policies to stimulate growth and increase investor’s confidence; review the national security architecture as this will have a ripple effect from a reduction in the loss of lives, high cost of transportation, food inflation, among others.

No argument here...

Oyerinde added: “On policy recommendations for the incoming government, we propose that the incoming government must demonstrate strong political will and nationalistic zeal to not only unravel the misery surrounding the fuel subsidy, on which over N4 trillion was expended in 2022, but also name and prosecute those found to have deprived the nation of huge developmental funds.

Ah, this one is easy

1.In 2021...we spent 2.1 trillion on subsidy...meanwhile oil prices were between 60 to 80 dollars a barrel...

2.In 2022, we spent 4 trillion or more on subsidy...oil prices were between 90-130 dollars per barrel.

The cost of crude went up last year and with it...the cost of diesel to transport the fuel, the fuel itself, and everything associated with fuel

And even then, subsidy costs are not enough to cover NNPC losses...because

3.In 2021 March...landing cost was N230, in 2021 June, it was N261, now it is....N510 as at November 2022... the same fuel which must be sold at N180 at the pump....

With the rise in the cost of petrol and the cost of everything....the cost of subsidies goes up

By 2023.....subsidy will cost nearly 4 trillion in the first 6 months.

And when I have been saying that we should remove subsidy for the past 11 years, people come here to call me names. Subsidy has to go. It is a monster that eats and eats and eats and can never be saitisfied.

And then there is the massive corruption in false subsidy claims, and lies told, and the massive smuggling that puts more pressure on our revenue...because fuel is above N400 in all our neighbours...and in the whole of West Africa. We are subsidising fuel for nearly 400 million people....and we refuse to stop because cheap fuel, and because smugglers...big men, and small men...make money.

Even if we cut the massive corruption associated with it, and close all the borders....the rising cost of petrol, and the rising cost of diesel will Still force increases in subsidy costs.

And guess where we would be taking the money from, and what we would be using to pay off the loans

Either we pay N600 per liter now for petrol at the pump...or we pay N1000 per liter of fuel at IMF HQ, World Bank and China People's Bank HQ..as we have been doing for over 5 decades.

Subsidy must go. It is a monster and a scam.


P.S

I will not be responding to any abusive comments.

Anyone who no understand am..sorry.

Meanwhile...anyone who wants to get why I think subsidy is wrong should ponder this..

We sell fuel at N180...or even 350....the same fuel that we bring in at N510. Tell me, where is the profit there? How are we going to build refineries and so forth when we NNPCL is not making money selling fuel, and is losing billions. Tell me, where is the money going to come from...and how can we cover for rising production costs?

Tell me that...instead of wasting sputum abusing me and calling me paid agent.

And some people still want us to vote APC

ARE THOSE PEOPLE NATURALLY FOOLISH OR WHAT?

ANY WAYS MINE AND MY KINGS MEN VOTE ARE FOR PETER OBI

VOTE L.P

.

ibechris:
Apart from village meeting.

Can u allow a 90years old man to run a tech company in this age. Asiwaju is an old school. He is pretty behind in everything.

During his time as Governor,he was not among the best performing governor. He was totally not in the ranks of governors who did well.

So,how do anyone think he has the magic wand to change the country when most youths in Lagos have all turned to Street cultists and agbero of all sorts.

Before I debate with you, I will like to ask what age range are you ?
I witnessed his government as a governor and I can vouch he was in the rank of the best governors of his era.
His master plan for lagos is what his successors inherit hence we see the pace of development in lagos over the years.
His records still stand, ask grown folks around you about him if you are too young and naive ( no disrespect to you )
Have a nice day my friend.

Holla911:
Before I debate with you, I will like to ask what age range are you ?
I witnessed his government as a governor and I can vouch he was in the rank of the best governors of his era.
His master plan for lagos his what his successors inherit hence we see the pace of development in lagos over the years.
His records still stand, ask grown folks around you about him if you are too young and naive ( no disrespect to you )
Have a nice day my friend.

Leave sentimentsbehind.

He was not a performer.
Every governor talks about his reign not about his successors.
Let him talk about his own personal performance.
After all oaths of office was not taken this same day.

However,I schooled at ijeshatedo grammar school in Okota area of Lagos built and completed by one good man named Jakonde.

No governor since the history of this country has ever surpassed that great man in the areas of development not even Peter Obi.

Lastly,I am igbo before bringing up tribalism.

During the days of Obi,he out performed his peers not even Fashola can come close.

During the days of Tinubu governor Duke out and Ibori out performed Tinubu and the the former Gomve state governor who were his peers I think Dankwambo.

U can Google these facts.

Tinubu was never a match to these men I just mentioned.