The Lagos Chamber of Commerce and Industry (LCCI) called on the federal government to stop borrowing the exorbitant loans that would make Nigeria an indebted country, and advised that the loans borrowed should match the country’s long-term repayment capacity.
LCCI President Dr Michael Olawale-Cole said the advice is appropriate and follows the federal government’s proposed plan to take out loans to finance the 2022 budget.
Olawale-Cole stated this on the sidelines of her budget analysis session entitled “Budget Analysis for Business Intelligence: What the Numbers and Policy Statements Mean for Business” in Lagos.
The head of the Lebanon Chamber of Commerce and Industry also advised the federal government to focus its attention on other areas to raise funds to implement the budget rather than burdening the private sector with additional taxes.
In his words, “The federal government should consider other areas to raise funds to implement the budget and of course taxes are a must for everyone, but at the same time, we should not put too much pressure on the private sector in the region to increase revenue. We appeal to the federal government Expand the tax net against pressure on highly compliant taxpayers.
“There is also money that can be borrowed from abroad at low interest rates and even from within in exchange for expensive bonds or loans which will put a lot of pressure on our cost as a nation and on interest rates and in the long run make Nigeria heavily indebted. These are issues we must try to avoid. While There is nothing wrong with taking loans, the loans should be proportional to the ability to repay in the long term and not pass the burden on to governments and future generations.”
According to him, the federal government plans to spend 17.13 trillion naira in 2022, which is an 18 percent increase over the 13.59 trillion naira planned for 2021, saying that the size of the budget reaffirms the government’s commitment to pursue an expansionary fiscal policy to stabilize growth and deepen Diversification of the Nigerian economy.
He said that the total government spending plan showed that recurrent spending (other than debt) is estimated at 6.91 trillion neys, which represents 40 percent of total spending, and 20 percent higher than the 2021 budget.
He noted that the government needs to monitor the rise in recurring spending (especially employees), which he said is more sustainable to enable the private sector to create jobs while the government creates a thriving business environment.
He noted that the revenue and capital expenditure performance of the 2021 budget indicates the financial resilience of the Nigerian economy.
This should be strengthened to achieve better results in the 2022 fiscal year. He added that the higher expectations of non-oil revenues compared to oil revenues if they are effectively implemented and achieved will reduce the impact of external shocks arising from oil fluctuations on the economy.
For his part, CEO of Financial Derivatives Co. Ltd., Mr. Bismarck Rewan, said that deficit spending did not result in the intended impact on the economy, stressing that financial spending at the present time is not complete with sufficient domestic and foreign investments.
He noted the need to address Nigeria’s financial challenges by increasing pumping through high-quality investments in productive sectors, fiscal consolidation, and diversifying the revenue base.
He also pointed out the need to reduce leakage through accountability and transparency in public finances and the abolition of subsidies.
He stated that the economic performance will largely be determined by the successful implementation of the 2022 budget, stressing that the 2022 budget is the product of the development plan of the federal government.
Rewan mentioned that the sectors to watch out for in 2022 include information and communication technology, agriculture, financial services, transportation, construction, manufacturing and trade.
The Director General of the Budget Office of the Federal Republic of Nigeria, Ben Akabwezi, said that increasing the country’s revenue base is the only way to finance the 2022 state budget.
The head of the Institute of Chartered Accountants of Nigeria (ICAN), Mrs. Comfort Olu Itayu, said the budget deficit is a concern, warning that the high level of debt in Nigeria will only deplete the country’s foreign reserves and exacerbate foreign exchange. rates.
Representative of the President, Manufacturers Association of Nigeria (MAN), Mansoor Ahmed, Director of JMG Limited, Mesioye Francis, urged the Federal Government to invest in tools and equipment that would do more with fewer resources.
He said access to financing remains a major challenge for the real sector of the country’s economy, while also adding that the federal government’s lagging integration plan is still not effective enough to discourage imports.
However, he stated that only allocations were made in the budget for the payment of subsidies for 2022, adding that allocations were also made to the energy sector reform program to facilitate the tariff that reflects the cost.