NECA Boss Wants VAT Dropped to 3%, Says Unemployment Rate May Hit 33.5%

By Adedapo Adesanya

The total percentage of unemployed Nigerians may hit 33.5 percent in 2020, according to the Nigeria Employers’ Consultative Association (NECA).

The current unemployment figure stands around 23.1 percent according to the National Bureau of Statistics (NBS). NECA has said lack of job opportunities and the shutdown of several companies were some of the reasons for the expectations in rise of Nigerians without jobs.

According to the Director-General of the association, Mr Timothy Olawale, this is a huge disadvantage to the country as it can’t be a major world player without a strong labour force in place. He called on the Federal Government to put in place the necessary policies that will drive the growth of the economy and also create more jobs.

“There is no better time for the government to focus on radical industrialisation of the country to make it the hub of economic activities in the West African sub-region and also ensure Nigeria benefits maximally from the AfCFTA, than now,” he said.

He also asked the government to encourage industrialization and fit its fiscal policies to promote ease of business that will eventually raise people out of poverty.

“We have consistently taken the lazy path of tax increases that stifle and further burden businesses rather than the ingenious way of promoting and stimulating production.

“The government should demonstrate a bold attempt to industrialise the country and take it out of the woods by embracing a major policy shift from just focusing on taxation,” he added.

Proffering possible economic policies, Mr Olawale said: “What our economy requires now are radical far-reaching policies like the abolition of the Value Added Tax (VAT) on real estate sales, financial services and domestic airlines ticket sales and abolishing capital gains tax on sales of shares and import duty on spare parts.

“Reduction of VAT on small traders to 3 percent, the abolition of import duty on machinery and raw materials, among many others, will directly stimulate production and create wealth for the nation and its citizenry.”

With the possibility of high unemployment leading to lower output, Mr Olawale said that Nigeria has to tackle this issue to enable it to reposition itself at the centre of economic activities in the West African sub-region due to the African Continental Free Trade Agreement (ACFTA) signed recently.