NACCIMA miffed by private sector performance in 2024

Identifies biggest threats, urges urgent economic reforms
The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has said the 2024 economic performance was unsatisfactory for the private sector, calling for economic reforms to address imbalances threatening the sector in the country.

In a statement, yesterday, the National President of NACCIMA, Dele Oye, asserted that all data, metrics and statistics confirmed that the private sector bore, in full, the burdens of the nation’s economic reforms, facing very harsh conditions including inflation, increased borrowing costs, and currency devaluation.

Oye, who emphasised the urgent need for reforms to avert further economic strain on the private sector as the New Year begins, noted Nigeria as a country with huge potential, innovative private sector minds, capital and opportunities, and deserves a listening economic team that must recognise the private sector as stakeholders.

He said: “We should agree that the 2024 economic performance was unsatisfactory for the private sector. All data, metrics and consequent statistics confirm that the Nigerian private sector has borne, fully, the negative burdens of economic reforms, while, in contrast, the public sector continues to thrive and expand.

“All economic benefits of the recent economic reforms have been translated to the public sector through high capital transfers and revenues. The private sector faced higher inflation, higher cost of borrowing/repayment for existing loans, CBN’s unpaid $2.4 billion forwards, currency devaluation and higher costs in all sectors of the economy.”

According to him, this continued imbalance caused by increased public sector expenditure destroyed value in the private sector due to excessive fiscal deficits, financed through government borrowing at very high unsustainable interest rates.

He said: “We are, therefore, making recommendations and suggestions that may be considered in the short to medium term. Fiscal deficits arise when public sector expenditure exceeds public sector income. The funding of these fiscal deficits through borrowing results in high interest rates and hyper inflation. The solution to high interest rates and high inflation is for the public sector to spend less and to start becoming an efficient productive unit.

“We also need to debunk the myth of the government earning more revenue under the pretext of improved productivity. For the avoidance of doubt, payment of Customs duties and taxation are not due to improved government productivity. These revenues are purely private sector revenues, which constitute a transfer of wealth and capital from the productive private sector to an ever-expanding unproductive public sector.”

The public sector does not own factories. Rather it extracts value from the citizens through regulatory fiat. Awarding contracts is not the same as enhancing production.”

On the 2024 Tax Bill, Oye said the media engagement between federal and state governments in newspaper and press releases only further confirms the disconnect between government and the masses.

The NACCIMA boss advised governments at all levels to understand their role as referees, intermediaries and facilitators.

“Governments are not industry players, owners of capital or benevolent entities. It is the right of tax-payers and citizens to demand basic facilities like security, utility infrastructure, social services, education and health.

“International statistics show a clear correlation between inflation and government deficits (countries with reserve currencies like the United States are exceptions). For this reason, the size of government must remain marginal.”