Chairman of the Organised Private Sector of Nigeria (OPSN), Dele Kelvin Oye, has stressed that imposing more taxes and sanctions would not address the problem of inflation but instead stifle business growth.
“Inflation is the highest form of tax; it affects everyone. The best way or a sustainable way to get out of this problem is not by more taxes or by the government imposing more sanctions, it’s to create an environment where investments can flow freely. You have to make Nigeria more competitive than its neighbours. Make it a destination for business.”
“If there is no ability to pay, you cannot continue to tax people out of existence. Taxation is not the only way, its productivity, and the fuel for productivity is reasonable regulation, single-digit loans, and most importantly, increased stakeholder engagement. If we have this, the government can relax and collect its taxes because the more profit we make, the government is the ultimate beneficiary,” he added.
Speaking during an interview on ARISE NEWS on Thursday, Dele Kelvin Oye, expressed concerns over Nigeria’s economic outlook for 2025, citing the growing budget deficit and lack of sufficient support for the private sector. He highlighted the need for policies that prioritise productivity and financial access for businesses.
“Currently, we are already worried by the huge deficit in the budget, which is almost at about ₦13 trillion, and just yesterday, we heard that the government was increasing the budget with another ₦4.5 trillion. The only happy news from there, even though we don’t know the source, is that the money is going to be used to support the Bank of Agriculture and the Bank of Industry, which is one of what we have been crying for in the private sector, that those institutions should be properly funded so that we can have reasonable single-digit loans to support the productive sector,” he said.
He noted that in the 2024 budget, most of the gains went to the public sector, with an increase in allocations, but he acknowledged that the government now appears to be making efforts to support the private sector.
“We are seeing a deliberate action by the government now, to try and see how they can fund the private sector, especially the productive sector. If that money truly is going to go to the private sector through those institutions, it will naturally increase productivity,” he stated.
Oye urged the Central Bank of Nigeria (CBN) to take further steps by reducing the Monetary Policy Rate (MPR) and ensuring that there is a cap on public sector borrowing.
“If the public sector pays back its loan that it’s currently owing, the inter-bank rate will fall, the interest rate will also fall with the support of the CBN,” he explained.
He also emphasised the need for a competitive free trade zone, citing neighbouring countries such as Ghana, and called for better stakeholder engagement before major government decisions are made.
“It doesn’t look nice when you are on television and you see that the rules have been changed. Just like yesterday, we saw an announcement that Customs will be enforcing the 4% on FOB for goods coming into Nigeria. We are just coming out of reforms, the industries are just recovering. I would appeal, either they suspend that now, or at least let it focus on people who are buying luxury goods. Anybody that is interested in production or wants to use it for raw materials should not be saddled with that additional 4%,” he said.
Speaking on the business environment, he criticised the imbalance between the banking and industrial sectors, questioning how banks were making record profits while industries struggled.
“I want to congratulate our banks; they have been able to do very well without supporting us. You can see they hit the trillion mark in their last financials. But in a country where the bank is growing and the industry is falling, the government should ask why. How do the banks make so much profit? It’s very easy, it’s the high interest rate. Who is the highest payer of interest rate? It’s the government. If you look at the 2024 budget, almost a quarter of it is going into payment of interest,” he said.
Oye also addressed global economic shocks, particularly those linked to US policies under Donald Trump. He noted that Nigeria had already experienced a major setback with the closure of USAID, forcing the government to provide ₦4.1 billion for HIV-related funding.
“A lot of goods will be returned, and a lot of our people will be returned, sometimes unjustly. But what is important is there is a learning curve from this,” he said.
He also pointed to potential disruptions in the oil sector due to Trump’s energy policies.
“We are also going to have problems in the oil sector because Trump’s intention is to drill and drill and also try to force OPEC and Saudi Arabia to bring down the price of oil… in all this, Nigeria should really calibrate its budget and that’s why we are very worried the National Assembly should not unnecessarily start doing senatorial increases for most of these government MDAs who are not part of the productive sector,” he warned.
He commended local industries, particularly the Dangote Refinery, for making strides in global trade.
“I am very proud to hear that Dangote Refinery is selling PMS or petrol to Aramco. These are the kind of things the government should encourage. You should encourage local production, make our local companies global players, and provide them all the support… we must find a way to encourage our local production so that we can reduce our dependence on foreign imports and actually use that scarce dollar for our local production,” he said.
Faridah Abdulkadiri
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