Nigeria Must Enhance Tax-GDP Ratio: LCCI

According to the Lagos Chamber of Commerce and Industry (LCCI), Nigeria’s tax-to-GDP ratio needs to be improved immediately to reach the country’s ambitious revenue estimate of N34.82 trillion.

In response to the contents of the 2025 budget proposal, Dr Chinyere Almona, the Director-General of the LCCI, made this statement on Thursday in Lagos.

The nation’s 2025 budget, titled “The Restoration Budget: Securing Peace, Rebuilding Prosperity,” was presented by President Bola Tinubu before a joint session of the National Assembly on Wednesday.

According to Tinubu, the nation aims to generate N34.82 trillion in revenue by 2025 to pay for its anticipated N47.90 trillion in spending, which includes N15.81 trillion for debt repayment.

Almona asserts that expediting tax reforms, streamlining procedures, and involving the unorganised sector was crucial to achieving this.

She stated that the nation needs to use technology to increase the revenue base and reduce leaks.

“Fiscal discipline must complement these efforts to effectively manage the N15.81 trillion debt servicing allocation.

“Nigeria must prioritise high-impact, self-sustaining projects and explore alternative funding mechanisms, such as public-private partnerships, to keep debts within sustainable limits.

“Structural reforms are indispensable to reducing inflation to 15 percent and stabilizing the exchange rate at N1,400 to the dollar, ” she said.

She said that resolving supply chain bottlenecks in the food and energy sectors, expediting regional petroleum production projects, and promoting fiscal and monetary policy alignment would boost the Naira’s value and reduce inflationary pressures.

“Achieving the ambitious oil production target of 2.06 million barrels daily requires decisive action to resolve pipeline vandalism, theft, and underinvestment.

“Across the three streams of operations in the oil and gas industry, a sound regulatory environment can boost activities and investments in the short term,” she said.

Speaking on the budget’s priorities, Almona praised Tinubu’s focus on infrastructure, security, health, education, and agriculture to attain inclusive growth and macroeconomic stability.

In comparison to prior allocations, she said the N4.91 trillion for defense was a remarkable amount.

However, she stated that the financing needs to be supplemented by improved monitoring and intelligence capabilities as well as concurrent investments in youth empowerment and poverty alleviation.

According to Almona, the N4.06 trillion set aside for infrastructure and sizeable sums for health and education necessitated quick and open project implementation.

Although the budget sets ambitious targets, she asserts that these ambitions depend on strong policy implementation, consistent execution, and consistency across government initiatives.

“Beyond the figures and assumptions, budget implementation is the key performance driver.

“The 2024 budget implementation cycle extension to June 2025 should be closely watched to avoid such in the future as it can signal weak budget execution.

“We call on the National Assembly to expedite action on the appropriation debates.

“We are concerned that much-needed scrutiny and consultations on the budget may not be possible if the January-December budget cycle is to be maintained,” she said.

Manomsi Mallum/NAN