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Can non-oil sector sustain Nigeria's recovery?
With about 94.3 per cent contribution to Nigeria's economy in the third quarter of this year, Nigeria's non-oil sector has been touted to champion an economic recovery. What needs to be done to harness opportunities in the sector? Chijioke Odo, the Leader for West Africa Global Trade Advisory at Deloitte, joins CNBC Africa for this discussion.
Fri, 02 Dec 2022 11:56:59 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- The non-oil sector in Nigeria has made significant contributions to the economy, with segments like ICT and entertainment showing growth and resilience.
- Challenges persist in sectors like manufacturing due to Forex constraints and tax regimes, necessitating a balanced and strategic approach to taxation.
- Strategic tax reforms and targeted incentives in the upcoming Finance Bill 2022 hold the key to driving growth and development in key sectors like real estate and manufacturing.
Nigeria's non-oil sector has taken center stage in the country's economic recovery, with a significant 94.3% contribution to the economy in the third quarter of this year. This growth has been attributed to various segments within the sector, such as ICT and entertainment, which have shown promising signs of development. Chijioke Odo, the Leader for West Africa Global Trade Advisory at Deloitte, shed light on the factors driving this growth during an exclusive interview with CNBC Africa. Odo highlighted the resilience of the ICT sector amidst the challenges posed by the COVID-19 pandemic, emphasizing the sector's ability to adapt and innovate in response to changing business dynamics.
While the non-oil sector thrives, challenges persist in areas like manufacturing, where issues like Forex constraints and tax regimes have hampered growth. Odo underscored the need for a balanced approach to taxation, pointing out that overtaxing industries like manufacturing could diminish profits and stifle expansion. He urged the government to carefully consider the impact of taxation on businesses and consumers, advocating for targeted incentives and waivers to stimulate growth in key sectors.
Looking ahead, Odo emphasized the importance of a strategic approach to tax reforms and incentives in the upcoming Finance Bill 2022. He called for a shift towards a more scientific and pragmatic taxation system that ensures compliance, fairness, and sustainable revenue generation. In particular, Odo proposed incentivizing the real estate and manufacturing sectors to foster continued growth and development.
As Nigeria navigates its economic recovery journey, the spotlight is on the non-oil sector as a key driver of growth and resilience. With strategic policy interventions and targeted support, the sector holds the potential to propel Nigeria towards sustained economic prosperity.
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