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Tuesday, June 18, 2024

JUST IN: How Tinubu’s policies aid food prices increase, others- Obi

The Labour Party (LP) presidential candidate for 2023 election, Peter Obi, has described the Federal Government’s decision to fix duties on imported raw materials and other goods on flow of foreign exchange as inappropriate and one of major reasons for the country current economic challenges.

Obi said that the move by the President Bola Tinubu led administration to allow foreign exchange determine the charges, which had been inconsistent since assuming office, portends a great danger for the nation’s economy.

The Anambra State former governor stressed that the decision directly fuels the inflationary spike which is the basis of increasing cost of goods and living as well as closure of manufacturing firms in the country.

In a statement released on Wednesday through his official social media handle, he warned that should the administration refuse to backtrack, manufacturers and other business operators may abandon the nation’s port and go elsewhere for the services.

Obi added that should the apex government allow these manufacturers and other importers to embrace ports of neighbouring nations, the country’s port will be underutilized and results in serious economic challenge for Nigeria.

According to the statement, “I wish to urgently call on the Federal Government of Nigeria to end the inconsistency in duty charges as it is affecting the general business atmosphere in the country. The federal government should stop the arbitrary and ever-increasing customs duties as it is now negatively impacting businesses and the cost of items, and this portends a huge danger to the economy.

“A situation where at the point of initiating importation, Form M and other documents related to importation are based on a particular rate of exchange, for example, N1000 to $1, being the prevailing exchange rate at the time which the importer of goods was used to calculate the entire process, from the import initiation to receipt of goods in his warehouse.

“Then suddenly when the goods arrive in Nigeria, and duties are calculated at different rates, say N1400 to $1, it becomes a serious business challenge that results in business losses. Worse still, it directly fuels the inflationary spike which is the basis of increasing cost of goods and living.

“Such arbitrary charges will obviously lead to further closure of businesses, and attendant job losses. This is because at the time of the initiation of the business, calculations, including duties, have been made based on the prevailing exchange rate, and the prevailing market prices. If this situation is not corrected, our importers may resort to using ports of nearby countries, a situation that will leave our ports under-productive, and further deepen our economy into a worse situation as a result of loss of revenue.

“The government should also show consistency in its policies as this will help with economic forecasting and business planning. Businesses are dying and manufacturers are shutting down because of the poor and inconsistent economic policies of the government.

“All efforts of the government should be directed at supporting businesses, especially those in the manufacturing sector, to keep their businesses afloat and keep the economy growing, as the small business sector remains the most critical engine of economic growth.

“We cannot afford to target high customs revenues at the expense of the survival of local businesses, employment and reasonable cost of living”.


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