The Nigerian Association of Chambers of Commerce, Industries, Mines, and Agriculture (NACCIMA) has raised concerns about Nigeria’s economic outlook for 2025, citing the increasing budget deficit and inadequate support for the private sector.
This was expressed by the president of NACCIMA Dele Oye while speaking during an interview on ARISE NEWS’ This Morning Show on Thursday.
According to Oye, Nigeria’s budget deficit, already estimated at about N13 trillion, has been further exacerbated by an additional N4.5 trillion, raising questions about the country’s fiscal sustainability.
While he acknowledged the government’s decision to channel some funds towards the Bank of Agriculture and the Bank of Industry, he stressed the need for proper funding of these institutions to ensure the availability of affordable, single-digit interest loans for the productive sector.
“Currently, we are already worried by the huge deficit in the budget, which is almost at about N13 trillion, and just yesterday, we heard that the government was increasing the budget with another N4.5 trillion. The only happy news from there, even though we don’t know the source, is that the money is going to be used to support the Bank of Agriculture and the Bank of Industry, which is one of what we have been crying for in the private sector, that those institutions should be properly funded so that we can have reasonable single-digit loans to support the productive sector,” he said.
Shift Towards Private Sector Support
Oye, who is also the Chairman of the Organised Private Sector of Nigeria (OPSN) noted that in the 2024 budget, most of the financial allocations favored the public sector, leading to increased government spending while leaving businesses with limited financial backing. However, he acknowledged what appears to be a shift in policy, as the government now seems to be making deliberate efforts to fund the private sector.
“We are seeing a deliberate action by the government now, to try and see how they can fund the private sector, especially the productive sector. If that money truly is going to go to the private sector through those institutions, it will naturally increase productivity,” he stated.
More Taxes Not the Solution
Oye emphasized that imposing additional taxes and sanctions would not resolve Nigeria’s economic challenges, particularly inflation, but would instead stifle business growth.
“Inflation is the highest form of tax; it affects everyone. The best way or a sustainable way to get out of this problem is not by more taxes or by the government imposing more sanctions, it’s to create an environment where investments can flow freely. You have to make Nigeria more competitive than its neighbors. Make it a destination for business.”
He stressed that without the ability to pay, businesses cannot sustain increased tax burdens, advocating instead for policies that enhance productivity.
“If there is no ability to pay, you cannot continue to tax people out of existence. Taxation is not the only way; it’s productivity, and the fuel for productivity is reasonable regulation, single-digit loans, and most importantly, increased stakeholder engagement. If we have this, the government can relax and collect its taxes because the more profit we make, the government is the ultimate beneficiary,” he added.
Call for CBN Intervention and Better Economic Policies
Oye urged the Central Bank of Nigeria (CBN) to lower the Monetary Policy Rate (MPR) and place a cap on public sector borrowing to ease the economic burden on businesses.
“If the public sector pays back the loan that it’s currently owing, the inter-bank rate will fall, and the interest rate will also fall with the support of the CBN,” he explained.
He also called for the establishment of a more competitive free trade zone, drawing comparisons with neighboring Ghana, and stressed the importance of engaging stakeholders before implementing major economic policies.
“It doesn’t look nice when you are on television and you see that the rules have been changed. Just like yesterday, we saw an announcement that Customs will be enforcing the 4% FOB for goods coming into Nigeria. We are just coming out of reforms, the industries are just recovering. I would appeal, either they suspend that now, or at least let it focus on people who are buying luxury goods. Anybody that is interested in production or wants to use it for raw materials should not be saddled with that additional 4%,” he said.
The Banking and Industrial Sector Imbalance
Oye criticized the apparent imbalance between Nigeria’s banking and industrial sectors, questioning how banks were reporting record profits while industries struggled to survive.
“I want to congratulate our banks; they have been able to do very well without supporting us. You can see they hit the trillion mark in their last financials. But in a country where the bank is growing and the industry is falling, the government should ask why. How do the banks make so much profit? It’s very easy, it’s the high interest rate. Who is the highest payer of interest rate? It’s the government. If you look at the 2024 budget, almost a quarter of it is going into payment of interest,” he said.
