Oil, Taxes & Growth: Driving Nigeria’s Economic Surge

Some economists have called on the Federal Government to sustain increased crude oil exports and accelerate the enactment of the tax reform bill to spur economic growth.

They made the call in separate interviews with the News Agency of Nigeria (NAN) in Lagos on Monday.

The economists said that reducing corporate and employee taxes, particularly for lower-income workers, would stimulate investment and expand the manufacturing and Small and Medium Enterprises (SME) sector.

They also said that it would improve the macroeconomic environment and reduce inflation, crucial for fostering investment confidence and lowering the cost of living.

Prof. Bright Eregha, Lecturer of Macroeconomics at Pan-Atlantic University, Lagos, said the projected growth rate was achievable because the economy had been increasing on a quarterly basis.

“The Niger Delta region has experienced relative peace, which has led to more investment in crude oil production, raising its output in the process.

“The government has been successful in reforming the foreign exchange market, thereby entrenching transparency and reducing speculation,” Eregha said.

He emphasized that the transport sector had been experiencing increased growth because of the uninterrupted supply of petroleum from the domestic market, which is becoming more affordable over time.

“Even the Compressed Natural Gas (CNG) Initiative is now an option for many people, which is getting more patronage,” Eregha said.

He stressed that the service sectors would continue to make gains due to the strides being made in the banking and insurance sectors of the general economy.

Also, Mr Nerus Ekezie, former Director of the National Association of Small and Medium Enterprises (NASME), called for the accelerated passage and enactment of the tax reform bill to spur economic growth.

“This will reduce employees’ taxes and exempt the lowest cadre of workers, earning less than one million naira per annum, from paying taxes.

“This will engender economic growth and facilitate development,” Ekezie said.

He emphasised that one of the positives of the tax reforms was the proposed reduction in corporate taxes, which is quite significant.

“Where corporate taxes are reduced from 30 percent to about 20 percent it allows organizations to reinvest their funds into their businesses.

“This may lead to the expansion of the manufacturing and Small and Medium Enterprises (SME) sectors of the economy,” Ekezie said.

Dr Muda Yusuf, Chief Executive Officer (CEO) of the Centre for the Promotion of Private Enterprise (CPPE), said that the government could improve the macroeconomic environment to facilitate growth.

“More effort is needed to ensure investment confidence in the general economy, despite the gains being made in improving security challenges.

“The government should ensure that the inflation rate continues to decline, which will automatically lead to the reduction of food produce costs for Nigerians,” Yusuf said.

He said that the government could sustain its investment in key infrastructure renewal in the country.

“This will reduce the cost of production in the economy and expedite growth,” Yusuf said.

NAN recalls that the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, while unveiling a comprehensive economic plan aimed at achieving sustainable development, in Abuja, said the country’s economy would grow by at least 4.6 percent in 2025.

This is a significant increase from the 3.19 percent growth projected for 2024.

According to him, achieving these targets is essential for poverty reduction and fostering sustainable development.

He stressed the government’s commitment to fiscal discipline, revenue mobilization, and creating a favorable investment climate. (NAN)