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By Merit Ibe
The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has emphasised the need for government to manage its expenditure and expand the productive capacity of the economy to boost the tax base.
President of the association, Mr John Udeagbala , who made the appeal at the second quarter press briefing on the state of the economy, advised all levels of government to take a broader view of the implications of the debt-fuelled economic growth approach and look for other sources of funding.
Suggesting an increased tax base over increased taxes and leveraging investments through public-private-partnerships in exchange for tax credits spread over time, Udeagbala noted that it was now generally accepted that the current levels of debt service payments are considerably high and unsustainable given dwindling government revenues.
He restated some economic experts and analysts warning of looming macroeconomic instability if the trend of continued rising debt without corresponding revenue increase remains, citing the example of ongoing Sri Lankan economic crisis characterised by mismanagement, a rise in external debt, depleting foreign exchange reserves, a weakened currency and rising prices.
He said the experience provides a view to the kind of macroeconomic instability that economic analysts are concerned about. “We must therefore take the lessons to be learnt and reposition our economy for growth.”
