The Abuja Chamber of Commerce and Industry (ACCI), has kicked against the incremental budgeting adopted by the Federal Government for the 2017 fiscal year, saying a zero budgeting would have helped to curtail some excesses and take the country out of recession faster.
The Director General of the Chamber, Chijioke Ekechukwu, said this at a parley with journalists in Abuja, adding that the 2017 budget is not a zero budgeting as promised by the Federal Government even though it reflects serious efforts in bridging the infrastructure deficit in the country.
“We have seen the budget. It’s a deficit budget which we expect. It is a budget meant to bring us out of recession. A look at the budget shows cohesion between the budget and the medium term fiscal framework and the Nigerian economic recovery growth plan going on. We could see where the government has focused its effort. We also saw that in the areas of infrastructure, the government is doing a lot. And empower in road construction. Government also made a lot of effort in the area of transportation. Going through the details of the budget, you could see that a lot is to be spent on railways.
“But I have a little concern. We expected to have zero based budgeting that we were promised but again, it was an incremental budgeting that we had. A zero based budget was supposed to be as if we are just starting, using this year as a base year and go on from there. But the budget presented was an incremental budget where ministries and agencies added a percentage to the old budget that we had, and that is why we keep having an increased volume in budget figure,” he said.
The Director General however admitted that whether zero or incremental budget, the 2017 budget could take Nigeria out of recession if the current level of insurgency remains quiet and oil production remains at its current output figure.
He explained that with focus on massive road construction which is included in the budget, money will circulate among the populace and the economy will improve substantially. While commending government for its different efforts at encouraging small and medium scale enterprises, he reminded that no SME would survive without stable electricity, and with multiplicity of taxes.
He urged the government to work on the cost of funding for SMEs and ensure that interest rates from commercial banks are reduced to single digits.
“Our concern as a chamber of commerce is that if we don’t have steady electricity supply, no entrepreneur can succeed in its business. The second area of problem is the cost of funds provided by the banks. The interest is very high for entrepreneurs. That increases the cost of doing business and many of them are not able to survive.
“The most difficult aspect for SMEs is multiplicity of taxes. When a new business is starting, there should be tax incentives and tax holidays. But what we see today is that once a new business starts, all the taxes will be charged from FIRS, state and local governments. We know about some businesses that started in this Abuja that had to close because there were too many taxes for them to pay and they couldn’t cope.”
“We expect harmonization of these taxes. We are not saying government should not charge taxes because that is a major part of our revenue, but where the Federal, state and local government charges and the taxes are not harmonized, it is a major discouraging factor. This is a major setback otherwise, with the effort government is making we should gradually get out of recession,” Ekechukwu said.