By Charles Okonji
The founder of Centre for The Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, has stated that the 2023 Fiscal Policy Measures of the Nigerian government would not only hurt the economy, but will worsen the de-industrialization the country has been battling with.
Yusuf while analyzing the 2023 fiscal policy instrument noted that the construction and transportation sectors are also vulnerable to fiscal policy induced downside risks.
Regretting that some of the measures could aggravate inflationary pressures, he stressed that they are not only injurious to economic growth, but also to manufacturing, construction and transportation sectors.
According to the former LCCI DG, “Fiscal policy measures must seek to ensure a good balance between objectives of revenue generation, boosting domestic production, enhancing the welfare of citizens, promoting economic growth, deepening economic inclusion, facilitating job creation and recognizing societal ethos, beliefs and values.
“Specific reviews of the new fiscal policies are as follows, Non-Alcoholic Beverages, Fruit Juice, Energy Drink Excise, Duty of N10 per liter, Beer and Stout, 20 percent Ad-valorem Tax, N75/litre, Wine Production, 30 percent Ad-valorem; N75/Litre, Spirit and other Alcoholic Beverages, 30 percent Ad Valorem, N150/litre.
“It should be noted that Ad-valorem tax is based on the value of the product, which makes the impact even more injurious to industrialists. Sustaining current investments in these sectors would be a herculean task. These policy measures failed to reckon with the multifarious challenges which industry operators are currently grappling with, some of which include the following.
“Weak and declining consumer purchasing power, naira exchange rate depreciation which is taking a huge toll on cost of production, high energy cost, multiple taxes and levies already being imposed on the industry players, risk to jobs in the sector and its extended value chain including millions of MSMEs in its distribution and marketing chain, downside risk to manufacturing sector outlook in the Nigerian economy.
The MD of CPPE outlined the implication of such policies to be; “Drop in sales for investors in the sector, negative effect on tax revenue from the sector, loss of direct and indirect jobs which could be in a couple of millions, millions of farmers supply local inputs such as grains to the sector may lose their livelihoods, risk of decline in profitability and shareholder value, elevated risk of smuggling of the products.”
