FG Urged to Reduce Borrowing, Increase IGR by Widening Tax Net
Nume Ekeghe
The Chairman of the Nigeria Economic Summit Group (NESG), Mr. Niyi Yusuf and the Chief Executive Officer of Emerging Africa Capital, Mrs. Toyin Sanni have called on the federal government to reduce its borrowing and increase its level of tax collection.
They made the call yesterday at the Vanguard Economic Discourse where stakeholders converged to discuss “Taming Inflation and Stimulating Growth.”
They both agreed that inflation had become a daunting menace and gave recommendations such as the removal of fuel subsidies, collaboration between the fiscal and monetary authorities, reduction in government spending, among others as ways to stimulate economic growth.
Yusuf said: “Government should enhance efficiency and transparency while reviewing all forms of untargeted subsidies, tax waivers, and incentives by increasing non-oil revenues through tax net expansion and collection efficiency.”
He added that there should be an integrated fiscal management strategy to expand the funding mix through public-private partnership (PPP), innovative structured finance, and intervention funds.
He added: “Contain Inflation by reducing federal government resort to CBN Finance. The CBN also needs to adopt a single market-reflective exchange rate and there is a need for collaboration between the fiscal and monetary authorities to support the economy.”
He also urged the government to facilitate domestic trade and boost value addition through the removal of forex and trade restrictions.
“The CBN also needs to set a clear monetary policy framework that increases access to finance and eliminate risks created by monetisation of CBN ways and means,” he added.
On her part, Sanni said: “Inflation will likely continue to trend upwards in the short to medium term due to the intensified fuel scarcity across the country with little or no clarity on possible solutions, the ripple effect of the flood event on agriculture outputs, and the scarce and expensive foreign exchange.
“Nigeria can reduce government spending by cutting back on subsidies and other forms of government support. This can help reduce inflation by decreasing the amount of money in circulation and in increasing taxes, Nigeria can also increase taxes to decrease aggregate demand and help control inflation.”
She noted that improving infrastructure and investing in infrastructure could improve the overall efficiency of the economy and increase productivity, which could help to increase economic growth and decrease inflation.
Also, she added that the government could increase transparency in the allocation of resources and in the management of public finances, to improve the overall efficiency of the economy.
“Nigeria’s government can take steps to reduce corruption, which can help to improve the overall efficiency of the economy and increase foreign investment.
“Nigeria can also increase exports by diversifying its economy to include more agricultural and non-oil exports. This can help to reduce the country’s dependence on oil exports and decrease the impact of fluctuations in global oil prices on the economy,” he added.
