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The N77 trillion debt could hinder Tinubu’s government’s progress.



The Federal Government is putting the weight of its N77 trillion debt on Nigeria’s manufacturers, according to the Manufacturers Association of Nigeria.The association added that a number of hefty taxes have been imposed on its members.

The Manufacturers CEO Confidence Index released its first quarter report on Monday. Entitled “Special Focus: MAN at the Receiving End of National Debt Crisis,” the paper The tax burden of the country, according to MAN, has “endless domino effects of escalating public debt on the manufacturing sector.

“The association observed that private investments in the manufacturing sector are having an adverse effect due to Nigeria’s increasing domestic debt.It claimed that this results in fewer credit facilities being available and higher lending rates.

It became out that paying off foreign debts is another factor contributing to the naira’s depreciation.

Citing the “indiscriminate imposition of high and multiple taxes on manufacturers,” MAN held the FG responsible for the unfavorable economic environment in the nation.”First off, increasing national debt is significantly stifling private investment in the manufacturing sector by lowering credit availability and necessitating higher interest rates.

“As foreign currencies are primarily used to service external debts, a strong demand for them further weakens the naira and drives up the cost of importing essential inputs produced outside of the country for manufacturers.

“Additionally, increased loan servicing is using up more foreign exchange, exacerbating the long-standing shortage of foreign exchange that has afflicted the manufacturing sector.

More income is needed to pay off higher debt, the statement continued.The statement said, “In an effort to raise money, the Nigerian government has persisted in creating a hostile business environment by arbitrarily imposing high and numerous taxes on manufacturers.””Large public debt resulted in low foreign capital inflow and investment, which exacerbated the currency scarcity that has continued to be a sticking point for manufacturers.”

The association issued a warning to the government, telling it not to view the high taxes imposed on the industrial sector as “the last resort” for raising money to pay off the country’s debt.”The country’s debt crisis is not a result of inadequate revenue, despite the popular belief in government circles that Nigeria has a revenue problem.

It is anti-growth to view manufacturing taxes as the last resort for curbing the debt problem.”MAN pointed out that the nation hasn’t yet felt the effects of its debt financing on the many difficulties facing the industry.

“The manufacturing sector, which has historically been the recipient of debt financing, has not experienced a discernible effect from the debt financing on the various issues that have plagued its performance over the past several years.

Notwithstanding the enormous rise in the nation’s debt profile of more than 410% over the previous eight years, MAN members are terrified of the country’s infrastructure degradation, currency scarcity, credit crunch, and depreciating value of the naira.

“In spite of numerous taxes, Nigeria’s true issue is not the creation or collection of revenue, but rather the embezzlement of collected funds to conceal them from official records.

“”MAN believes that inheriting N77 trillion in debt is a huge burden and will probably restrict the accomplishments of the incoming administration,” the statement continued.It was suggested by the association that the FG should:

1. Expand the tax base by capturing more information on informal sector business owners, hence expanding the tax base.

2. Use the Federal Inland Revenue Service to strictly implement the Voluntary Assets and Income Declaration Scheme.

3. To stop tax revenues from leaking away, find and fix more loopholes in the tax code.

4. Encourage financial restraint by cutting back on governance expenses and closely adhering to CBN Act section 38 (sub-section 2) and Fiscal Responsibility Act section 41.

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