LCCI tells Abuja, don’t rebase GDP to take more loans as tax Tsar Oyedele bullish about reform implementation by Q2 2025
Abuja has been warned by the Lagos Chamber of Commerce and Industry (LCCI) not to use the proposal to rebase Gross Domestic Product (GDP) as an excuse to take more loans and further impoverish Nigerians.
The National Bureau of Statistics (NBS) has concluded plans to unveil a rebased GDP figure by the end of January.
LCCI President Gabriel Idahosa gave the warning in Lagos at the 2025 Economic Review and Outlook Conference organised by the chamber.
The LCCI alert came on the heels of disclosure by Presidential Committee on Fiscal Policies and Tax Reforms Chairman, Taiwo Oyedele, that the committee is making progress with engagement with critical stakeholders, saying the Tax Reform Bills would be ready before the end of the first quarter of 2025 (Q1 2025).
Idahosa at the conference attended by economic experts, including Biodun Adedipe, urged the government to remain focused on driving through the economic reforms to achieve set goals.
“The monetary authorities should not get comfortable with rebased inflation figures if they come out lower than what we currently deal with at 34.6% as of November 2024,” he said.
“To the fiscal authorities, the rebased figures for our GDP (likely to go higher than current figures) should not give room to more debts supported by the argument of a comfortable debt-to-GDP ratio.”
Idahosa noted that the projected deficit of N11.3 trillion (3.4 per cent of GDP) in the 2025 budget of N49 trillion “Will rely on domestic and external borrowing, raising concerns about debt sustainability.”
He added: “The government’s target is to achieve a GDP growth rate of 4.2% in 2025 while reducing inflation to 15%. These projections hinge on successful policy implementation and global economic stability.
“As of 2023, Nigeria’s tax-to-GDP ratio was 10.6%. This is lower than the average of 15.6% for African countries in 2023; Nigeria’s tax-to-GDP ratio has historically been low and is one of the lowest in the world.”
Adedipe in his own input predicted a GDP growth rate of 4.12 amid ongoing macroeconomic reforms.
He said inflation “Is expected to reach an inflection point in the early part of 2025, causing a potential downward trajectory of MPR.”
Oyedele made a virtual presentation in which he highlighted the benefits of GDP rebasing, saying it would have an impact on projected tax to GDP ratio and measurement of per capita income, and improve investors’ perception of the country.
He assured that the Tax Reform Bills should become laws before the end of Q1 2025 to enable the committee give a three-month notice before implementation by the end of Q2.
For the first time in his adult life, he enthused, “We have this comprehensive reforms where we are focusing on businesses, how to make them more competitive, how to bring down their cost, how do you bring down their tax rates, how do we ensure that small businesses can thrive without the excess burdens they have been dealing with for how long, how do we protect the vulnerable people, the low income earners.”
– Daily Trust.
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