The Nigerian Employers’ Consultative Association has stated that the country has been losing around $2.5 billion monthly for failing to meet the Organization of the Petroleum Exporting Countries crude oil production allocation of 1.8 million barrels per day. .
In a statement, NECA CEO Adewale-Smatt Oyerinde said that although the country’s crude oil production grew 4.2% to 1.23 million barrels per day in December 2022, it was still in short supply.
He stated that there is still a deficit of 0.57 million barrels per day, which translated into a monthly loss of around 2.5 billion dollars for the country.
According to him, oil theft seemed to go on unabated and the unsustainable subsidy on petroleum products had conspired to reduce government revenue, leading to an absurd buildup of debt.
He said that the mismatch between fiscal and monetary policies, which were deflating investor confidence, has made the country unattractive for Foreign Direct Investment.
“Crude oil production grew in the month of December 2022 by 4.2% mom to 1.23 million barrels per day, but remained significantly below the 1.8 million barrels per day allocated by the OPEC to the nation, amounting to about 2.5 billion dollars. monthly loss at an average of $100bp,” he commented.
Speaking further, the NECA chief expressed the need for the government, especially the incoming one, to show the political will to implement policies that will return the economy to a growth trajectory.
“Deliberate efforts must be made to reverse some of the current policies and implement new ones. All leaks associated with government revenue (oil theft, skewed concessions, fuel subsidy, etc.) must be blocked. A comprehensive review of the tax administration must be initiated to make it more equitable and favorable to investors”.
However, Oyerinde lamented that while governments in other climates were lowering tax rates to improve economic activities, promote sustainable consumption and attract investors, Nigeria cannot continue to overtax its businesses and citizens.
“With more than 50 different taxes, levies and rates and the Corporate Income Tax hovering around 35%, raising taxes to increase revenue will be counterproductive. As the nation approaches the N77trn debt mark with negligible impact on infrastructure development, the incoming government must develop strategies to diversify the revenue base through reviving the country’s lagging non-oil sectors.
“While there have been projections of a global recession in 2023, now is the time for a major paradigm shift in our economic philosophy. Over the past decade, the country has spent over N10 trillion on fuel subsidies, around N15.5 trillion on capital expenditure, N2.5 trillion on health and around N3.9 trillion on education. This is a misplacement of priorities and shows that critical elements for development, such as education, health and infrastructure, have suffered due to a gross misplacement of our economic priorities”, he concluded.