In a statement on Wednesday, ActionAid acknowledged the positive impact of the tax exemptions but highlighted pressing economic concerns.
“The continuous interest rate hike by the Central Bank of Nigeria, aimed at curbing inflation, has not yielded the desired results,” the statement read. “While these hikes were intended to reduce inflation, prices continue to soar, leaving many Nigerians struggling to make ends meet.”
Aliko Dangote, Chairman and CEO of the Dangote Group, has warned that the interest rate hikes will have devastating consequences for businesses, making survival nearly impossible. The Manufacturers Association of Nigeria (MAN) has echoed these concerns, advocating for policies that support local industries. This underscores the need for a comprehensive review of the tax regime to ensure fairness and support for local industries.
ActionAid Nigeria believes that the focus on interest rates alone is misplaced, asserting that the root cause of inflation lies in the production sector. To effectively tackle inflation, the organization urges the government to prioritize production and address obstacles facing small business owners and farmers, including insecurity and lack of access to credit.
“ActionAid Nigeria calls for grants and low-interest loans for SMEs to expand and thrive in this economy,” the statement continued. “Supporting SMEs is crucial to addressing the hunger crisis and promoting economic growth. The government must take immediate action to address pervasive insecurity, invest in community-led peacebuilding initiatives, and provide support to victims of violence. Additionally, small business owners and farmers need access to affordable credit to expand their operations and increase production.”
The organization also demanded a revision of tax policies affecting multinationals and large companies. “The government needs to revisit the tax policies that have allowed multinationals to exploit our resources while paying minimal taxes. This is unacceptable and perpetuates inequality. The nation needs a fair and progressive tax system that ensures everyone contributes their fair share.”
ActionAid expressed deep concern about the impact of insecurity on smallholder women farmers, crucial to Nigeria’s food security. A recent survey conducted by ActionAid revealed that 73% of smallholder women farmers reported that insecurity has negatively affected their food production, with many losing crops, livestock, and farming equipment due to violent attacks.
“This is unacceptable and demands immediate attention from the government,” the statement emphasized. “Tackling food insecurity is essential to addressing the hunger crisis. The government must invest in agriculture and support small-scale farmers to increase food production and availability. Addressing poverty and inequality is also critical, requiring investments in social protection programs and progressive taxation to ensure all Nigerians have access to the resources they need to thrive.”
In conclusion, while ActionAid Nigeria praised the government for the withholding tax exemptions, it urged bold and immediate action to address the looming hunger crisis, pervasive insecurity, and obstacles to production.
“ActionAid Nigeria will continue to advocate for policies and actions that prioritize the needs of the people, not just the interests of the few. The future of our country and its people is at stake, and we must act now,” the statement concluded.
