President of the Manufacturers Association of Nigeria (MAN), Frank Jacobs has advised the President Muhammadu Buhari-led administration to privatise national refineries to make them fully functional and save money.
In an interview with with the News Agency of Nigeria (NAN) in Abuja, Jacobs said privatising the refineries, if fully functional, would also help boost the economic situation of the country.
“Government should consider privatising the four national refineries to make them fully functional to save money for other purposes,” he said.
“Proper deregulation of the downstream petroleum sector will encourage private investment in domestic refining and petrochemical industry.”
According to Nigerian National Petroleum Corporation (NNPC) financial reports, the state-owned refineries are notorious for losing money rather than making it.
Jacobs also said that external and domestic borrowing were important and credible options open to government in this period of economic hardship.
He, however, suggested that the borrowing be contracted on long-term basis with low interest rate and should be targeted, preferably to galvanise the productive sector.
MAN president also spoke on the need for government to scale down taxes such as Corporate Income Tax, Value Added Tax, and Personal Income Tax to reduce dwindling investment.
“This is necessary considering that the country is in recession with growth of the productive sector being negative and the prevailing weak consumption as a result of inflation.
“It is not advisable to increase CIT, VAT and PAYE; already the productive sector is hit with dwindling investment; any further tax increase will crowd out more investment in the sector.
“I will suggest that the current Tax-GDP Ratio of 12 per cent, which is below the World Bank benchmark of 18 per cent, may be raised by widening the tax net.
“Effort should also be made to ensure that all taxable individuals and entities are covered. Taxes on luxurious goods and property may also be raised.”