The Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture, and the Organized Private Sector of Nigeria have said that Nigeria’s massive public sector deficit is the biggest threat to the Federal Government’s goal of transforming the country into a $1tn economy by 2030.
In a statement, NACCIMA President, Dele Oye, charged the Federal Government to adopt and implement a more rigorous public financial management strategy, emphasising the need to prioritise capital over recurrent spending, aggressively expanding the tax base rather than raising tax rates, improving expenditure efficiency, and plugging leakages across all levels of government.
Oye, who Chairs the OPSN, said in a statement issued on Tuesday that “while structural reforms are essential, we must confront a hard truth: persistent public sector deficits and continual borrowing, much of it to finance recurrent expenditure, continue to crowd out private investment and exert inflationary pressures.
“We urge the Federal Government to implement rigorous public financial management by: prioritising capital over recurrent spending; aggressively expanding the tax base rather than raising tax rates; improving expenditure efficiency and plugging leakages, and accelerating the sale or concessioning of underperforming public assets.”
He noted that these are critical steps not only for restoring macroeconomic stability, but for rebuilding investor and business confidence.
He also commended the Federal Government, represented by the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, and the Central Bank of Nigeria Governor, Mr Olayemi Cardoso, for their candor in acknowledging the formidable macroeconomic and social challenges currently confronting the nation, as reiterated at the just concluded IMF/World Bank Spring Meetings.
The NACCIMA boss further applauded the government’s willingness to collaborate with development partners on job creation and youth empowerment, describing it as timely and commendable.
He said, “We recognise the government’s laudable commitment to single-digit inflation, job creation, digital infrastructure development, and the ambition to transition to a $1tn economy by 2030.”
He, however, noted that the recently released Africa Pulse report by the World Bank is a stark reminder of the urgent threat of deepening poverty in Nigeria, with the national poverty rate projected to surge to 56 per cent by 2027.
“The dramatic growth in the number of Nigerians living below the poverty line, surging inflation, youth migration, and the expanded fiscal deficit underscore the need for even faster, targeted, and pragmatic policy action,” the private sector chairman stated.
On key areas of concern and recommendations, Oye stated, “The central bank’s prevailing monetary stance, with commercial lending rates hovering at 30-40 per cent, risks stifling entrepreneurship, industrial production, and agricultural expansion.
“This credit environment, while targeting inflation, paradoxically holds the productive sector hostage and suppresses the job creation and innovation capacity of the private sector. NACCIMA, therefore, calls for targeted intervention funding and special credit windows for MSMEs and strategic sectors at concessionary rates to unlock growth, employment, and food security.”
On tackling youth migration and insecurity, the OPSN chairman noted that the exodus of skilled youths (Japa) is an ominous trend fueled by economic disenfranchisement and insecurity.
