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ActionAid Nigeria Commends Government on Withholding Tax Exemption, Demands Urgent Action to Address Looming Hunger Crisis and Insecurity in the Country

Abuja, Nigeria - 3 July 2024

ActionAid Nigeria commends the Federal Government for exempting small businesses, manufacturers, and farmers from withholding tax, a move that acknowledges the critical role of local industries and SMEs in driving economic growth and development. However, as ActionAid Nigeria acknowledges this as a step in the right direction, we also sound a clarion call on the looming hunger crisis and pervasive insecurity in Nigeria and hold the government accountable for its inaction.

ActionAid Nigeria is deeply concerned about the impact of insecurity on smallholder women farmers, who are critical to Nigeria's food security. A recent survey conducted by ActionAid Nigeria across the country revealed that 73% of smallholder women farmers affirmed that insecurity has affected their food production, with many reporting loss of crops, livestock, and farming equipment due to violent attacks. This is unacceptable and demands immediate attention from the Federal Government.

Tackling food insecurity is crucial to addressing the hunger crisis, and ActionAid Nigeria calls on the Federal Government to invest in agriculture and support small-scale farmers to increase food production and availability. We also demand that the government take immediate action that includes investing in community-led peacebuilding initiatives and providing support to victims of violence.

The continuous interest rate hike by the Central Bank of Nigeria, aimed at curbing inflation, has unfortunately not yielded the desired results. Whilst the hikes were intended to reduce inflation, prices continue to soar, leaving many Nigerians struggling to make ends meet. Aliko Dangote, Chairman and CEO of the Dangote Group, has warned that the interest rate hike will have devastating consequences for businesses, making it nearly impossible for them to survive. The Manufacturers Association of Nigeria (MAN) has echoed Dangote's concerns, calling for policies that support local industries. This highlights the need for a comprehensive review of the tax regime to ensure it is fair, equitable, and supportive of local industries. ActionAid Nigeria believes that the focus on interest rates alone is misplaced and that the root cause of inflation lies in the production sector. To truly tackle inflation, ActionAid Nigeria urges the government to prioritise production and address the obstacles facing small business owners and farmers, including insecurity and lack of access to credit.

ActionAid Nigeria also calls for grants and low-interest loans for Small and Medium-sized Enterprises (SMEs) to be able to expand and thrive in this economy, as it is the biggest way to tackle poverty. They are the backbone of our economy, and supporting them is crucial to addressing the hunger crisis and promoting economic growth. Moreover, small business owners and farmers need access to credit to expand their operations and increase production. We urge the government to implement policies that provide affordable credit to SMEs and support sustainable agriculture practices.

Furthermore, ActionAid Nigeria demands that the government expand the tax brackets for multinationals and big companies, as well as reduce tax holidays for them. The government needs to revisit the tax policies that have allowed multinationals to exploit our resources whilst paying minimal taxes. This is unacceptable and perpetuates inequality. The nation needs a fair and progressive tax system that ensures everyone contributes their fair share.

ActionAid Nigeria will continue to push for policies and actions that prioritise the needs of the people, not just the interests of the few. The future of our country and its people is at stake, and we must act now.


Andrew Mamedu

Country Director, ActionAid Nigeria