• Country’s economic growth threatened as per capita income dips to $835.49 –IMF
By Uche Usim
The Nigerian Association of Chambers of Commerce, Industries, Mines and Agriculture (NACCIMA), has raised grave concerns over Nigeria’s economic outlook for 2025, citing the mounting budget deficit and the insufficient support for the private sector.
In a television interview yesterday, NACCIMA President, Dele Oye, voiced deep concerns about the country’s fiscal situation. He pointed out that Nigeria’s budget deficit, currently hovering around N13 trillion, has only worsened with the introduction of an additional N4.5 trillion, leading to serious questions about the country’s long-term fiscal sustainability.
Oye expressed cautious optimism regarding government’s move to allocate some of these funds to the Bank of Agriculture and the Bank of Industry, but stressed that proper and continued funding of these institutions was essential for the private sector to access affordable, single-digit loans.
He said: “Currently, we are already worried by the huge deficit in the budget, which is almost at about N13 trillion and just yesterday, we heard that the government was increasing the budget with another N4.5 trillion. The only happy news from there, even though we don’t know the source, is that the money is going to be used to support the Bank of Agriculture and the Bank of Industry, which is one of what we have been crying for in the private sector, that those institutions should be properly funded so that we can have reasonable single-digit loans to support the productive sector,” he stated.
As Chairman of the Organised Private Sector of Nigeria (OPSN), Oye also noted that the 2025 budget predominantly favors the public sector, which has led to a spike in government spending, while leaving businesses with limited financial backing. Nevertheless, he highlighted a potential policy shift, as the government appears to be making a concerted effort to direct more funds to the private sector.
“We are seeing a deliberate action by the government now, to try and see how they can fund the private sector, especially the productive sector. If that money truly is going to go to the private sector through those institutions, it will naturally increase productivity,” he emphasized.
Oye also warned that increasing taxes and imposing sanctions will not solve Nigeria’s economic challenges, particularly inflation, and may instead stifle business growth.
“Inflation is the highest form of tax; it affects everyone. The best way or a sustainable way to get out of this problem is not by more taxes or by the government imposing more sanctions, it’s to create an environment where investments can flow freely. You have to make Nigeria more competitive than its neighbors. Make it a destination for business,” he advised.
He further explained that imposing more taxes without addressing businesses’ ability to pay will only hinder economic growth. Instead, he advocates for policies that promote productivity and economic growth.
“If there is no ability to pay, you cannot continue to tax people out of existence. Taxation is not the only way; it’s productivity, and the fuel for productivity is reasonable regulation, single-digit loans, and most importantly, increased stakeholder engagement. If we have this, the government can relax and collect its taxes because the more profit we make, the government is the ultimate beneficiary,” Oye said.
Oye also called on the Central Bank of Nigeria (CBN) to lower the Monetary Policy Rate (MPR) and limit public sector borrowing to reduce the strain on businesses.
“If the public sector pays back the loan that it’s currently owing, the inter-bank rate will fall, and the interest rate will also fall with the support of the CBN,” he noted.
Additionally, Oye emphasized the need for a more competitive free trade zone in Nigeria, drawing comparisons with neighboring Ghana, and stressed the importance of engaging all relevant stakeholders before implementing significant economic policies.
“It doesn’t look nice when you are on television and you see that the rules have been changed. Just like yesterday, we saw an announcement that Customs will be enforcing the 4 per cent FOB for goods coming into Nigeria. We are just coming out of reforms, the industries are just recovering. I would appeal, either they suspend that now, or at least let it focus on people who are buying luxury goods. Anybody that is interested in production or wants to use it for raw materials should not be saddled with that additional 4 per cent,” he concluded.