NECA sounds caution note on AfCTA

July 19th, 2019

*worries about multiple taxation

By Chesa Chesa

The Nigeria Employers Consultative Association (NECA) has sounded a note of warning that Nigeria risks becoming a dumping ground for cheaper imported goods, following the signing of the African Continental Free Trade Agreement (AfCFTA) by President Muhammadu Buhari.

Nigeria became the 53rd country to join the African Continental Free Trade Area on July 8, 2019 after President Buhari signed the AfCFTA Agreement in Niamey, Niger Republic.

Director-General of NECA, Timothy Olawale, expressed this fear after he and a delegation of the Association held a meeting with President Buhari at the Presidential Villa, Abuja.

Speaking to State House correspondents after the meeting with the President, Olawale said that if challenges of critical infrastructure were not addressed to make business and production competitive, Nigeria would be shortchanged by the deal.

The NECA Director-General acknowledged the benefits Nigeria could derive from signing onto the agreement, but stressed that the disadvantaged environment with regards to the issue of agriculture, like power and road networks, remained as some of the hindrances.

According to the NECA boss, ”We don’t want a situation where our businesses are not competitive due to the disadvantage environment they operate.

”Of course we are all familiar with the disadvantaged environment with regards to issue of agriculture among which is power and the issue of road network, that is transportation for goods and services and accessibility to the different business environment.

”Before we start talking about benefits derivable from it, we must also talk of the likely damage it can do to an economy that is fragile like ours, which behaves on us as stakeholders and government to put all hands on deck to address those issues. Those issues bother on those variables that will ensure the competitiveness of Nigerian businesses and industry”.

He added however, that “there are lots of benefits inherent in it. We also know that is is capable of endangering capital inflow into the country.

“What we are saying is that if all these issues are not addressed properly, to make our businesses competitive, definitely we are going to be at the receiving end, to the extent that our nation will become a dumping ground. And even some of the factories that are even struggling presently may end up folding up.

”Of course we know the history of the textile sector and that can be repleted in any sector and we don’t want us to get to that extent. That is why we are saying government should put mechanism in place to address these issues so that we can be competitive and so that we can take our rightful place and maximize the benefits of the AfCFTA agreement.”

The NECA Director General said he was at the villa with other stakeholders of the organised business sector to lend their position on any plan to increase taxes in the country, as any attempt to increase tases will over burden the economy and businesses.

”Rather than any increase in taxation because as it is, organized businesses are already being overburdened with all sorts of taxes and levies. As a matter of fact, we have calculated 105 different taxes and levies we are paying as we speak, which is cumbersome and burdensome.

”So, we had advised that rather than resort to any form of increase in taxation, what government should be looking at is putting mechanism in place to widen the tax net in such a way that almost 65 percent of non-compliant tax payers are captured in the tax net.

”That way, more revenue will accrue into the coffers of the government. We specifically also voiced are concerned with the suggestion and proposal out there that Value Added Tax should be increased. We have advised government that if it comes to be, will reduce the purchasing power of Nigerians workers as well as the poor masses that the president as we know is working hard to improve their a lot.

”We are saying that if government must as a matter of an avoidable necessity increase VAT, it should target luxury goods as well as the extra affluence in the society, not the poor masses or consumption goods and services that are for the benefit of the masses, ” he noted.

Responding to the issues raised by NECA, President Buhari assured them that the Federal Government was determined to take steps that will boost employment figures in the country.

”Nigeria is a blessed country with abundant resources. We have all it takes locally to meet our most basic needs. Our history of unnecessary importation of the most basic items meant we were exporting jobs to other countries at the expense of our own citizens.

“There are challenges in some areas that need to be addressed. I want to assure you that we are looking into these and other matters to ensure we have a sustainable platform for businesses to succeed”, he stated.

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