The Lagos Chamber of Commerce and Industry (LCCI) yesterday warned that the proposed rebasing of the country’s Gross Domestic Product (GDP) should not be an excuse to take more loans.
LCCI President, Mr. Gabriel Idahosa spoke in Lagos at the 2025 Economic Review and Outlook Conference organised by the chamber.
This is just as the Chairman of the Presidential Committee on Fiscal Policies and Tax Reforms, Mr. Taiwo Oyedele disclosed that the committee is making progress with engagement with critical stakeholders, saying the Bills would be ready before the end of first quarter 2025.
Idahosa at the conference attended by economic experts including Dr. Biodun Adedipe, urged the government to remain focused on driving through the economic reforms towards achieving set goals.
“The monetary authorities should not get comfortable with rebased inflation figures if they come out lower than what we currently deal with at 34.6% as of November 2024.
“To the fiscal authorities, the rebased figures for our GDP (likely to go higher than current figures) should not give room to more debts supported by the argument of a comfortable debt-to-GDP ratio,” he stated.
The president stated that the projected budget deficit of N11.3 trillion (3.4% of GDP) in the 2025 budget of N49 trillion “Will rely on domestic and external borrowing, raising concerns about debt sustainability.”
He said, “The government’s target is to achieve a GDP growth rate of 4.2% in 2025 while reducing inflation to 15%. These projections hinge on successful policy implementation and global economic stability.
“As of 2023, Nigeria’s tax-to-GDP ratio was 10.6%. This is lower than the average of 15.6% for African countries in 2023; Nigeria’s tax-to-GDP ratio has historically been low and is one of the lowest in the world.”
He also stressed that Nigerian economy could witness transformative economic growth in 2025 if decisive and strategic policy actions are formulated and implemented to address lingering economic challenges.
He, however, stated that closing infrastructure gaps should remain a top priority of the government, which would necessitate innovative funding models and enhanced public-private partnerships to accomplish.
In the state of the economy outlook for 2025, foremost economic analyst Adedipe predicted a GDP growth rate of 4.12 amidst ongoing macroeconomic reforms.
On his part, Dr. Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms rebasing exercise, which will shift the base year for GDP calculations from 2010 to 2019, is not merely a technical adjustment. It represents a fundamental shift in how Nigeria’s economic performance is measured and perceived. By incorporating more recent economic activity and structural changes, the rebased GDP will offer a more accurate reflection of the country’s current economic size and composition.
He further predicted that inflation “Is expected to reach an inflection point in the early part of 2025, causing a potential downward trajectory of MPR.”
In his virtual presentation, Oyedele also highlighted the benefits of GDP rebasing, saying it would have an impact on the country’s projected tax to GDP ratio and measurement of per capita income, and improve investors’ perception of the country.
He assured that the tax reform bills should become laws before the end of first quarter 2025.
“The Consumer Price Index (CPI) basket will also be rebased to impact inflation, giving a clearer indication of where the country is going.
Dr Tope Fasua, Special Adviser to the President on Economic Affairs, said that implications of the rebasing included changes in the size and structure of the economy and increased tax to GDP ratio.
Fasua emphasised the value of optimism, saying that bad news cost African countries about 3.2 billion pounds yearly.
“Every problem is an opportunity for value.
“We must think about a campaign to promote Nigeria’s image as the cleanest, safest and most organised country in Africa,” he said.
Chief Francis Meshioye, MAN President, emphasized the resilience of the Nigerian business community despite significant economic challenges in 2024. Speaking through Dr. Segun Alabi, he highlighted issues such as high inflation and Naira depreciation and called for a collaborative effort between the private sector and the government to overcome these obstacles, drive economic growth, and create jobs. He stressed that the government cannot address these issues alone.