Richard Ginika Izuora
As industries in Nigeria face production challenges following rising energy costs, the Centre For Promotion Of Private Enterprise, CPPE, has advocated expanded investment in the renewable energy sector.
Chief executive officer of CPPE, Dr. Muda Yusuf, in a position paper, noted that industries in the country are currently contending with high energy cost as the cost of diesel has gone up by over 400 per cent in the face of incessant grid collapse.
Yusuf, said that public power supply has become increasingly unreliable, while there
is a slump in consumer purchasing power which is affecting aggregate demand.
He said that to facilitate energy access, and in line with the global trend on decarbonisation, fiscal policy measures should be aligned to promote better access to renewable energy.
To make this work, he advocated zero import duty on solar panels, inverters, solar batteries, zero import duty on all renewable energy equipment and installations and zero Value Added Tax, VAT on renewable energy equipment, including batteries.
In addition Yusuf, called for a tax holidays for renewable energy companies in the country
The CPPE submits that if the government can budget N4 trillion [about $9 billion] for petrol subsidy, it should be able to afford these incentives to improve energy access and promote the development of renewable energy. The potential benefits to the economy and the environment far outweighs the revenue loss from these concessions, he added.
He further warned that the imposition of excise duty makes Nigeria products more expensive relative to products from the neighbouring countries who are in the same economic community with Nigeria.
“Following the proposal last year by the Finance Minister that excise duties will be imposed on a number of products, the Manufacturers Association and other Business Associations pleaded with the government to suspend the imposition of excise duty for the following reasons:
“The implication is that Nigerian industrialists will lose market share to countries in the West African sub region under the ECOWAS trade liberalization scheme because the cost of production in Nigeria is much higher and the imposition of excise duty will make domestically produced products even more expensive.
“There is also the welfare implication of the citizens whose incomes have been highly bartered by the high inflationary pressure.
“We therefore appeal once again that the timing of the imposition of excise duty of selected manufacturing firms is in auspicious and should therefore be suspended to demonstrate greater sensitivity to the plight of manufacturers in the Nigerian economy.” he appealed.