The International Monetary Fund (IMF) has provided guidance for Nigeria’s managers on ways to trigger lasting economic growth.
In Article IV Report released at the weekend, the Fund recommended determined and well-sequenced implementation of the authorities policy intentions like exchange rate reforms and petrol subsidy removal would pave way for faster , more inclusive , resilient growth.
It said a package of policies that restores macroeconomic stability through a tightening of policies to rein in inflation and reduce naira pressures, combined with structural reforms to ease trade barriers, strengthen the business environment, and support climate resilience will boost confidence, increase investment, and incentives job creation.
“Addressing the security challenges in the agriculture and oil sectors is critical. Efforts to strengthen foreign exchange (forex) inflows from hydrocarbon exports, including by further enhancing transparency, would improve the fiscal and external balances” the fund said.
According to IMF, fiscal policy needs to support vulnerable house-hold, create space to boost social and development spending and maintain debt sustainability.
“Fiscal policy is held back by one of the lowest revenue takes in the world of 9.4per cent of Gross Domestic Products (GDP) in 2023. As the government finalises and presents it’s reform agenda, sequencing will be key to ensure safety nets are in place or strengthened before proceeding with other measures that could adversely impact poor and vulnerable households”, the Fund said.
It said the Nigeria’s Medium Term Economic Framework (MTEF) outlines reforms to improve domestic revenue mobilisation and diversify the economy.
“A Presidential Committee on Fiscal Policy and Tax Reforms is developing a comprehensive revenue mobilisation strategy which aims to simplify the tax structure and revamp key tax legislation for which the fund stands ready to provide capacity development or desk reviews. Staff notes that achieving fast and large revenue gains as envisaged by the authority will require determination and political capital.
Staff welcomes the authorities cautious approach of making additional spending conditional on having achieve revenue gains. Budget credibility can be enhanced through improvements in fiscal reporting and monitoring, and reporting of fiscal risks from Public-Private Partnerships can be enhanced, as identified by Fund Capacity Development Support “, he stated.
Continuing , the fund said revenue measures in the year would focus on revenue administration a d base broadening. It stated that the authorities aim to ease payment of tax remittances from Ministries, Departments, and Agencies (MDAs), leverage technology and third-party reporting to broaden the tax net and enhancing excise collections by transferring administrative responsibilities to the Federal Inland Revenue Service.
