Market News

by Bunmi Aduloju

The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has urged the federal government to target economic stimulus packages, increase investment in agriculture, and foster a predictable tax environment to tackle the projected rise in poverty.

On April 25, the World Bank had said more Nigerians will be poorer by 2027 — despite the country’s resource-rich status.

World Bank said poverty is expected to “increase by 3.6 percentage points over 2022 to 2027” in Nigeria and the Democratic Republic of Congo.

In a statement on Sunday, Dele Oye, NACCIMA president, outlined 13-point short-term measures to halt and reverse the projected increase.

On economic stimulus packages, Oye, who is also the chairman of the Organised Private Sector of Nigeria (OPS), advised the government to implement targeted economic stimulus packages, including cash transfers, food assistance programmes, and direct support for small and medium-sized enterprises (SMEs).

“It is important to note that current support systems are often insufficient and lack proper structure, leading to instances of abuse and corruption. To address this, independent monitoring and thorough evaluation must be instituted across all processes,” he said.

Given that a significant proportion of Nigerians rely on agriculture for livelihoods, Oye said there is a need for targeted investment in the sector.

According to the NACCIMA president, subsidising inputs, providing long-term single-digit credit, and expanding training programmes can help increase food security and foster sustainable livelihoods.

He said the expansion of microfinance access for small businesses, cooperatives, and entrepreneurs can foster self-employment and alleviate poverty, adding that the trend of “japa syndrome” requires favourable lending conditions for women and youth, as well as urgent development of youth-targeted capital.

“Establishing robust vocational and skills training programmes for the unemployed and underemployed will enhance employability and support new entrepreneurs in high-demand sectors,” Oye said.

He urged the government to enhance its existing partnership with the German government on vocational training and collaborate with NACCIMA to expand nationwide vocational training opportunities.

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“Improving infrastructure, particularly in rural areas, will increase market access for farmers and small businesses, leading to increased incomes and, ultimately, poverty reduction,” Oye said.

The NACCIMA president said tax incentives for businesses investing in underserved regions and prioritising local employment are needed.

He noted that recent tax policy directions extending tax regimes to free trade zones and imposing punitive levies on international investors could discourage vital investment, saying such measures should be carefully reviewed to promote business growth and confidence.

“Public-private partnerships should be encouraged to finance economic development initiatives, leveraging combined resources and expertise for efficient delivery of social impact,” Oye said.

“The government can further support these efforts by de-risking major barriers for business investment, such as in the solid minerals industry, making it more attractive for private capital and boosting sectoral growth.

“Expanding social safety nets, which include unemployment benefits and healthcare access, will provide much-needed relief to those facing financial distress and support their pathways to recovery.

“Targeted awareness campaigns are crucial to ensure that vulnerable populations are informed about the various government programmes and services available to assist them.”

‘INSECURITY REMAINS MAJOR DRIVER OF RURAL POVERTY’

Speaking further, he said the worsening security crisis, ranging from insurgencies to armed groups disrupting agricultural activities, remains a major factor in rural poverty and food insecurity.

“It is vital for government to act swiftly and decisively to restore peace and security, especially in rural communities, thereby creating a stable environment for agricultural productivity and investment,” Oye said.

Furthermore, the NACCIMA president said Nigeria must maximise the opportunities presented by the African Continental Free Trade Area (AfCFTA) to boost intra-African trade, which holds huge potential for poverty reduction.

“Nigeria should reduce its reliance on raw material exports and instead prioritise adding value through local manufacturing. AfDB President Dr. Akinwumi Adesina aptly points out that industrialising via local manufacturing is fundamental to breaking the cycle of poverty and achieving genuine development,” he said.

“While much of Africa’s raw materials are exported, less than 2% are processed locally. Nigeria must reverse this trend to build a resilient, inclusive economy.

“It is essential to establish and maintain a robust, transparent framework for monitoring and evaluating all poverty-reduction initiatives, ensuring their effectiveness and enabling real-time improvements where necessary.”

On Nigeria’s debt profile, the NACCIMA president, citing the Debt Management Office (DMO), said “Nigeria’s total public debt soared to N144.67 trillion ($94.23 billion) as of December 31, 2024—an increase of 48.58% compared to N97.34 trillion ($108.23 billion) at the end of December 2023”.

“The report also noted a quarter-on-quarter increase from N142.32 trillion ($88.89 billion) in September 2024, underlining the growing challenge of debt sustainability,” he said.

“As the Honourable Minister for Finance and Coordinating Minister for the Economy, Mr. Wale Edun, has observed, Nigeria needs a minimum annual growth rate of 7% to effectively reduce poverty.

“Government must act decisively and without delay, pursuing a multifaceted strategy that combines immediate relief measures with long-term, strategic planning.”

By implementing the short-term interventions, Oye said “we can help shield Nigeria’s vulnerable populations and make meaningful progress in the fight against poverty”.