Igbo Congress says poor economic judgment causing hardship in Nigeria

The World Igbo Congress (WIC) has said poor economic policies of the Buhari-led administration are causing hardship on the people and creating business inactivity in the country.

The body said it is alarmed by the planned Value Added Tax (VAT) increase, border closure and the continued policy summersault of government.

The spokesman of WIC, Hon Basil Onwukwe, in a statement sent to The Guardian, said the Buhari administration, which lacks economic discipline, believed that it could tax its way into prosperity in an economy that is in peril.

“There is no conceivable way in which a VAT increase can help the present state of the economy other than strangulate business risk-taking, further stall current epileptic growths, and kill off whatever is left of innovative entrepreneurship. The only likely beneficiaries are the managers of government who would enjoy another round of cash haul that will eventually fly away.”

The body noted that over the past years, the Gross Domestic Product (GDP) has slipped to a paltry 1.2 per cent with business investments continuing to fall, and productivity remaining depressingly flat.

“The unemployment figure is at all time high and incomes have stagnated. Tax or VAT increase at this time will further stress the nation’s economic fabric, which can be likened to having someone sitting inside a bucket, and, at the same time, attempting to lift up the same bucket.”

WIC argued that the country’s democracy isn’t working the way it should. “We cannot forget in a hurry the deliberate attempt to muzzle the judiciary by having security agents invade the homes of judges at night on the allegations of corruption and how the several attempts made to annex the National Assembly sent the stock market tumbling. We must be seen to be serious for others to take us seriously; our democracy today is a charade.”

It stated that there are concerns that the new higher rate of VAT could also stoke inflation, cause cash flow problems, which could push some businesses into insolvency and trigger higher interest rates – increasing the danger of the economy lurching back into recession.

“Government has argued that when in debt trouble, one must cut spending and pass through a period of austerity until the debt burden is reduced. That means no meals out for a while, no new cars and no new clothes. It seems like common sense – even moral virtue – to respond this way. But, while that approach to debt works well for a single household in trouble, it does not work well for a national economy, as the spending cuts only worsen the problem. This is the paradox of thrift: belt-tightening causes people to lose their jobs, because other people are not buying what they produce, so their debt burden rises rather than falls.”

The WIC stated that the fundamental economic problem that currently troubles Nigeria is absence of infrastructure, manufacturing and production capacity.

It noted that businesses are not investing enough in new plants and equipment. “They are not adding jobs, largely because people are not spending enough to keep the economy going at full tilt. When USA failed into recession in 2008, government injected money and increased local labour like road repairs. Hence, we must retool our economic policy direction to serve our peoples need, not IMF or our foreign interests that have kept us into a perpetually neo-economic plan.”