The year 2022 was very different in light of the numerous issues that characterized it. While some of these issues were local and distinctive to only Nigeria, others were global, all leading to dire economic consequences for the country. While Nigeria was striving to recover from the impact of the Covid-19 pandemic that inflicted challenges of sustainability across the globe, businesses were forced to work under severe circumstances and this situation was further made worse by the numerous systemic contradictions. The Ukraine-Russia crisis caused a global increase in the cost of energy. Consequently, the crisis also impacted the global value chains which again compromised global sustainability, greatly impacting Nigeria. By comparison in fact, the Economic Intelligence Unit and other expert sources noted that 2022 was more tepid than 2021.
Beyond this crisis, factors like multiplicity of taxes, Forex’s unavailability for productive operations, inflation, insecurity and rising debt stocks have also caused organized businesses to struggle. Businesses were reported to have spent over $22 billion in alternative energy sources. The price of diesel in December 2021, reduced on a month-on-month basis from N289.37 to N288.07 per liter in January 2022, signaling a 0.44 percent decline. Compared to December 2022, the price skyrocketed to over N800 per liter. With companies finalizing their budget over the price of diesel in January, they had to spend over 500% more than the scheduled budget. Nigeria’s crude oil production also crashed at about 24.73 percent to 937,766 barrels compared to the 1.246 million barrels produced daily in 2021. As such, Nigeria lost over $2 billion to oil theft between January and August, due to the inability to meet OPEC’s quota.
Technical Skills Development Project was a major highlight.
Insecurity was another major issue that often affected businesses in 2022, as well as unabated gangsterism, and the migration of numerous youths in search for greener pastures. While it was expected for legislators and regulators to enact the role of business facilitators, businesses witnessed a surge in the bottlenecks shaped by regulators and the committees in the National Assembly. For instance, 2022 witnessed a huge increase in the percentage of summons of business leaders under the oversight function guise based on the constitution’s Section 88 and 89. These summons were reported to be distracting, as well as clogging the country’s economic development.
Evidently, this administration did leave a mark on organized private sector businesses in regards to taxes, levies and fees. Per survey, businesses were made to pay over 50 different legal and illegal taxes, levies and fees which included Company Income Tax, Stamp Duties, Capital Gains Tax, Personal Income Tax, Value Added Tax and a lot more which immensely clogged numerous companies. However, there were also bright glimpses in 2022. The efforts of ITF-NECA Technical Skills Development Project was a major highlight. This project, which was launched 10 years ago to help in the development of critical skills for industrial development, graduated over 10,000 skilled manpower in 2022 alone. With this, the project reduced the rate of unemployment that had ravaged the country.
Strikes by the Academic Staff Union of Universities, a major challenge.
Also, the National Health Insurance Act which was passed into law signaled another positive of 2022. This ensured a compulsory health insurance for all Nigerians. The re-invested efforts by the Federal Government to overtly curb oil thefts and vandalism also signaled a bright spot in 2022. Further, the recurring industrial strikes by the Academic Staff Union of Universities, a major challenge that had continuously ravaged the educational sector was resolved. Strategies were also implemented to enhance macroeconomic development, in spite of the numerous discrepancies between the fiscal and monetary authorities.
On the issues concerning 2023, the Director General of Nigeria’s Employers’ Consultative Association, Wale-Smith Oyerinde noted that the outgoing government must necessarily ensure a high level of stability in its policy. He pointed that the efforts pumped into curbing the menace of oil theft must be enhanced, as well as a more in-depth look at the possible problems of multiplicity of taxes that most businesses have been levied with, as it would be counterproductive to continually increase tax and burden the existence of these businesses. He stated that though most global problems could not be avoided, the government must resolve the discrepancies evident in our policies.
Upcoming administration must be bipartisan and promptly decisive.
Wale-Smith also recommended that the incoming administration demonstrate good political and nationalistic will to salvage the challenges surrounding fuel subsidy and bring to justice, those involved in clogging the nation’s development by embezzling developmental funds. He also noted that the incoming government should prioritize macroeconomic development and stability in the country. The NECA’s Director General stated that the incoming administration must be bipartisan and promptly decisive in addressing the numerous challenges stifling the growth of businesses in the country.
Related Link
NBS: Website
