The Nigeria Employers’ Consultative Association has stated that the country has been losing about $2.5bn monthly for failing to meet the 1.8m barrel per day crude oil production allocation by the Organization of Petroleum Exporting Countries.
In a statement, the Director-General of NECA, Adewale-Smatt Oyerinde, claimed that though the country’s crude oil production grew by 4.2 per cent to 1.23 million barrels per day in December 2022, it was still short.
He stated still a 0.57 million barrel per day shortfall, which translated to about $2.5bn monthly loss for the country.
According to him, oil theft seemed to continue unabated and the unsustainable subsidy on petroleum products had joined to reduce the government’s revenue, leading to absurd debt accumulation.
He said that misalignment between the fiscal and monetary policies, which were deflating investors’ confidence, has made the country unattractive for Foreign Direct Investments.
“Crude oil production grew in the month of December 2022 by 4.2 per cent month-on-month to 1.23m barrel per day, but remained significantly short of the 1.8m barrel per day allocated by OPEC to the nation, amounting to about $2.5bn loss monthly at an average of $100pb,” he remarked.
Speaking further, the NECA boss expressed the need for the government, especially the incoming one to demonstrate the political will to implement policies that will drive the economy back on a growth trajectory.
“Deliberate efforts must be made to reverse some of the current policies and implement new ones. All leakages associated with government revenue must be blocked (oil theft, skewed concessions, fuel subsidy, etc.). A wholesome review of the tax administration to make it more equitable and investor-friendly should be initiated”
Oyerinde, however, lamented that while governments in other climes were reducing tax rates in order to enhance economic activities, promote sustainable consumption and attract investors, Nigeria cannot continue to over-tax its businesses and citizens.
With over 50 different taxes, levies and fees and Company Income Tax hovering around 35 per cent, raising taxes in order to increase revenue will be counterproductive. As the nation nears the mark of N77trn in debt with negligible impact on infrastructural development, the incoming government must develop strategies to diversify the revenue base through the revival of the country’s lagging non-oil sectors.
While there have been projections for a global recession in 2023, the time for a major paradigm shift in our economic philosophy is now. Over the last decade, the country has spent over N10tn on fuel subsidy, about N15.5tn on Capital Expenditure, N2.5tn on Health and about N3.9tn on Education. This is a misplacement of priority and shows that critical developmental items such as education, health and infrastructure have suffered due to crass misplacement of our economic priorities,” he concluded.
