AfDB opposes Nigeria's economic strategy as NECA calls for the repeal of taxes
Nigeria's decision to focus on the import substitution model rather than generating income through the expansion of export markets and product diversity has come under criticism from the African Development Bank (AfDB).
Adewale Oyerinde, the director general of the Nigeria Employment Consultative Association (NECA), urged the federal government to do away with tariffs on carbonated beverages, claiming that President Bola Tinubu's suspension was insufficient.
Oyerinde stated that raising taxes on manufacturing companies is the equivalent of digging while in a trench while speaking yesterday in Abuja at the Nigeria Employment Summit organized by NECA.
"While the three-month suspension of taxes is good, a complete reversal will be beneficial," he declared. For taxes to be effective, the government must know when, how, and what to tax. The manufacturing sector is harmed by the levies that were implemented in the final months of President Muhammadu Buhari's presidency and should be completely abandoned.
Lamin Barrow, Director General of the Nigeria Country Department of the African Development Bank Group, stated in his keynote speech that Nigeria's low non-oil exports have left it vulnerable to the whims of the international oil markets, which has had a negative impact on its fiscal space and restricted expenditure on development.
He stated that although if manufacturing's contribution to Nigeria's GDP remained at roughly 7%, the sector's performance had declined over the previous five years.
"Between 2010 and 2020, the annual average cost of food imports was $6.4 billion, while the annual average revenue from food exports was $1.2 billion. A poorly functioning agricultural sector with little mechanization, low productivity, and weak value chains exacerbates the revenue concentration.
The revenue-to-GDP ratio in Nigeria, at around 8%, is among the lowest in the world and falls short of the 13% average for West Africa, he continued. Nigeria currently has enormous budget deficits, estimated at 6% of GDP, brought on by high state spending and declining crude oil export receipts.
Other initiatives that should be given top priority are boosting tax administration and collection, fixing collection leaks, and improving the effectiveness of public investment initiatives.
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