The Federal Government has outlined its strategic plan to counter the challenges posed by excess liquidity in the financial system, curb inflation and stabilise the economy.
The disclosure was made by the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, during a press briefing at the ongoing Spring Meetings of the International Monetary Fund (IMF) and World Bank in Washington DC.
Mr Edun confirmed the administration’s commitment to tackling the issue of surplus money circulating within the economy, stating, “We are determined to pin down Ways and Means to alleviate the pressure of excess money in the system”.
This measure, he explained, is aimed at facilitating a collaborative effort between fiscal and monetary authorities to reduce inflationary pressures and stabilize the exchange rate.
“We need to borrow less and focus more on domestic resource mobilization”, Mr Edun emphasised.
He stressed the urgency of improving tax revenue, citing Nigeria’s tax-to-GDP ratio of 10 per cent as insufficient compared to regional averages, signalling the need for comprehensive reforms.
“At 10 per cent to GDP, what should I say? It would appear as if some people are not paying their taxes”, Mr Edun remarked, underscoring the importance of leveraging technology and policy reforms to optimize tax collection efficiency.
The Minister outlined plans to streamline the tax system by consolidating revenue streams to maximize returns from key tax heads, ultimately doubling tax revenue within three years.
“If we eliminate the large number of taxes and bill people properly, we will gain in terms of the people’s willingness to pay and you will collect more revenue”, Edun said, advocating for a strategic overhaul of the tax framework to enhance compliance and revenue generation.
The Minister stated that the government is tackling agricultural issues worsened by insecurity, which is affecting farmers’ ability to reach their farms.
The government, he said, is working with organizations such as the African Development Bank (AfDB) to create agro clusters to increase food production nationwide.
At another event in Washington DC, the Finance Minister revealed that the Federal Government is aiming for over 60 per cent increase in revenue this year using digital technologies.
This strategic move, the Finance Minister said is pivotal in reducing the nation’s fiscal deficit from 6.1 per cent to 3.8 per cent of GDP as well as easing economic strains on Africa’s largest economy.
Edun spoke at the Semafor World Economy Summit, held concurrently with the World Bank and IMF Spring Meetings. He emphasised the critical role of digitisation and fiscal reforms stressing that stabilising the economy requires bringing down inflation, steadying the exchange rate, and ultimately lowering interest rates to encourage borrowing by investors.
