TODAY’S VIEWPOINT LOOKS AT REFORMS, TAXES AND NIGERIA’S FUTURE
A common denominator aching the average Nigerian, entrepreneurs and the private sector, is the economic climate.
Like a nimbus, it paints an atmosphere of a future of uncertainties despite assurances from government.
To the man on the streets and civil servants, tax increase is crippling, making even the current minimum wage a droplet in the ocean in the face of rising prices of goods and services.
Market is unsafe as stocks remain glued to shelves, low purchasing power having gagged patronage.
Private firms and big businesses are not finding things funny either since the economic situation has pitched them in a battle of survival of the fittest, bogged down by low sales and weight of taxes.
Private sector debts, for example, is said to be around seventy six trillion naira, which could lead to downsizing.
The domino effect of private sector debt will be felt by financial institutions, who might have to contend with spiralling loans default by borrowers.
Given this scenario, the onus lies on government to brighten the dampening climate.
In the bid to rejuvenate the economy, government should see the imperative to bridge the hiatus between policies and realities confronting Nigerians.
According to national bureau of statistics, on the aggregate, Value Added Tax (VAT) for first quarter in 2024 was reported at N1. 43 trillion, indicating a growth rate of 19.21% on a quarter-on-quarter basis from N1.
20 trillion in fourth quarter of 2023.
Amidst this, the purchasing power of Nigerians decreased in 2024 due to inflation, a weak naira, and subsidy removal.
In august 2024, the urban inflation rate in Nigeria was 34.58%, a 6.89% increase from the previous year. The highest inflation rate since the return to democracy in 1999.
Low purchasing power of Nigerians obviously accounted for unsold manufactured goods reaching a record n1.24 trillion in the first half of 2024, according to reports by manufacturers association of Nigeria.
While not contesting the fact that there are needs for reforms, and also that government needs revenue for infrastructure drive, there is the need for government to make tightening economic noose a gradual process for some measure of breath of air, which will in turn create an atmosphere of support for ongoing reforms.
Favourable tax condition at this period of economic strain will no doubt do the private sector some good, help drive down commodities prices for the relief of the masses.
On their part, manufacturers should avoid hoarding to create artificial scarcity to push demand for their products, but rather they should adapt to changing times by producing-on-demand.
While the present experience from government seems roughshod, Nigerians should remain optimistic for a silver lining in the present nadir, for tough times never last, but tough people do.
