ONICCIMA tasks FG on development-driven policies
With the consumer confidence index slipping from 4.8 Index points in the first quarter of 2019 to 1.2 Index points in the second quarter of 2019, the chamber urged the government to explore a downward review of the cost of governance, salaries and allowances of most political office holders in order to reduce the yearly federal budget recurrent expenditure.
“If the government must in line with her Fiscal Consolidation Strategy, effect the VAT rate increase, the National Assembly should while working on the Act, ensure that there is proper VAT listing threshold to avoid VAT compliance lumber on small businesses.
“It should be captured in a way that only ostentatious and luxury goods will be affected. Goods and services pertaining to Food, Education, and Healthcare which impact directly on the poor and vulnerable citizens should be exempted.
“Economic hardship on Nigerians will be heightened as the additional 2.5% increase in the VAT rate will prompt an increase in the real cost of investments leading to the high cost of goods and services thereby causing the 6-month low inflation rate achieved so far to ascent again”, the chamber added.
Citing the National Bureau of Statistics, ONICCIMA noted that the employment rate in the country stood at 23.1% for unemployment, 20.1% for underemployment and 55.4% for youth unemployment as in at the third quarter of 2018, adding that till date, there has been no improvement on it.
“The expected rise in the cost of goods and services arising from the VAT rate increase will reduce the purchasing power of the average Nigerian, thereby lowering demand rate for goods and services. When this happens, the producers will encounter reduced sales, unsolicited inventory will increase, with less or no business profit. At this point, businesses may begin to shut and more jobs will be lost”, ONICCIMA said.
On the constitution of an Economic Advisory Council, the chamber said the eight-man Council headed by Prof. Doyin Salami with seven other experts is a welcome development and a confirmation of the President’s resolve to lead the nation on the path to the economic recovery and growth in his second term.
“We at the Onitsha Chamber of Commerce, express confidence that with their wealth of experience, this team of seasoned economic experts will be able to direct the government on the right policies and strategies that would enhance the revitalization of the nation’s economy for the good of all stakeholders”, it added.
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