Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, on Wednesday unveiled five fiscal reforms he said the Nigerian government will introduce to create a conducive business environment, engender growth and boost investments.
The minister spoke at the Nigerian Investors’ Forum held on the sidelines of the World Bank/IMF annual meetings in Bangkok, Thailand.
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The forum, attended by corporate investors, bankers, government officials and others, was put together to showcase Nigeria’s bankable opportunities and strategic investor conversations in Bangkok.
Speaking at the event, Mr Oyedele said Nigeria plans to introduce “five big reforms” in the fiscal space as part of its efforts to attract the right investment and engender development. He listed the key reform areas to include agriculture and food security, power, regulation, inflation and data management.
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“I’ll give you some of the five big issues, big reforms, to expect from the government,” the minister said at the forum.
“One of it is agric reform. One of the drivers of inflation is food. So we are trying to now piece this together to find where these problems are coming from. One thing that we’ve seen recently is that when analysts go on TV, economists talk about why there is inflation; they will talk about bad roads, they will tell you insecurity, and I say yes to some extent.
“If roads are bad, they shouldn’t create inflation unless the roads are worse this year than they were last year. So, the data we have shows that roads are better generally than previously.”
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“So, we know where the inflation and the pressure for it is coming from. We’re going to tackle it there, not only just to bring it down to a single digit, but to leave it there.”
Mr Oyedele said the second significant reform to expect is power.
“You cannot power a one trillion-dollar economy in darkness,” the minister said.
“It’s impossible. So we’re looking at strategies to address the issues; whether it’s market-reflective pricing, dealing with issues around transmission, how do you drive efficiency, which is not there currently.”
The minister said inflation management remains another major reform target.
“So there is a dedicated focus on what we want to do, particularly from the fiscal side, to rein in inflation. And we’re working with sub-nationals. So everybody has their role.
“And this is not just to say something that’s nice, it’s a plan with assigned roles and responsibilities with timelines. So, my role is just to coordinate all of that together.”
Another pain point identified by the government, the minister said, was in the area of regulations.
He said: “We estimate that over-regulation, regulatory burden, lack of clarity, a number of those excessive burdens that we impose on businesses actually are costing us more than the combined revenue from corporate tax, personal income tax, and VAT combined.
“And you can ask me, what is the best example of a win-win outcome? Where the government wins, private sector wins even more. So we have started by developing a framework for economic policy for Nigeria.”
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The minister explained further that data management remains key.
“People say, and we agree with them, that it’s difficult to find data about Nigeria, especially from the fiscal side. Something as important as our tax-to-GDP ratio, you can’t find it easily. The World Bank in their NDU quoted an amount of tax-to-GDP ratio that is much lower than it is actually.
“If you go to the IMF today, their numbers are different. Within government, depending on who is saying it and when they are saying it, they quote different numbers. Now, we said, ‘not anymore’.
“So we are currently finalising all of that and it will be available on the website of the Ministry of Finance, finance.gov.ng. It will be updated timely, it will be accessible, it will be credible. We are playing now on visibility and elevating credibility.”
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