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FG rolls out 10-point roadmap to exit recession

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FG rolls out 10-point roadmap to exit recession

The federal government on Saturday lined out a 10-point fiscal plan in its efforts to get Nigeria out of the recession it has landed itself.

The minister of Finance, Kemi Adeosun who reeled out the plan in Lagos, among other things suggested that the government would dump the Central Bank of Nigeria’s (CBN) forex policy banning manufacturers and importers from accessing foreign exchange to bring in 41 items.

The apex bank’s decision had attracted criticisms, as it reportedly drove those seeking forex for such items to the black market to source for currency, especially the United States Dollar, a move that widened the gap between the official and parallel price for the currency.

Adeosun who represented the vice president, Yemi Osinbajo at the annual dinner of the Lagos Business School, revealed that among other things, government is to develop fiscal policies to reduce pressure on the parallel market.

The minister who itemised a number of fiscal policies and actions to be rolled out to tackle the key barriers to growth, said that the “Fiscal Roadmap is addressing barriers to growth that will drive productivity, generate jobs and broaden wealth creating opportunities to achieve inclusive growth.”

According to her, the current administration is determined to convert Nigeria to a productive economy rather than one that is consumption driven.

And “To do so, government would tackle the infrastructure deficit to unlock productivity, improve business competitiveness and create employment.

“Government would actively partner with the private sector to achieve this by use of a number of new funding platforms. These include the Road Trust Fund, which will develop potentially ‘tollable’ roads, and the Family Homes Fund which is an ongoing PPP initiative for funding of affordable housing”, she said.

Read also: Nigerian recession defers ECOWAS single currency to 2020 – Experts

Among others, government “would now allow collective tax relief such that companies will be able to jointly fund roads, subject to approval by FIRS and the Ministry of Works, and share the tax credit. This would be particularly attractive to firms in clusters such as industrial estates, many of which are plagued by poor road conditions”, she said.

She detailed the 10-point plan fiscal initiatives, and their expected impact below:
1. Recognise inherited debt profile after a robust audit process:
• Introduce promissory note programme to finance verified liabilities
• Issue debt certificates to contractors, Ministries, Departments & Agencies (MDAs), and State Governments
• Improve cash flow of businesses
•Improve Banks’ Non-Performing Loans (NPLs)
• Free up Banks’ balance sheet for lending to private sector
•Improve government’s business interaction with the private sector

2. Mobilise private capital to complement Government spending on infrastructure:
•Roads Trust Fund
•Family Homes Fund
•Extend infrastructure tax relief to a collective model to attract clusters of corporate entities
•Expand the provision of infrastructure
•Drive growth of non-oil sector.
• Drive economic growth

3. Strengthen fiscal/monetary handshake:
• Replace administrative measures on list of 41-items with fiscal measures to reduce demand pressure in parallel market
• Encourage domestic food production through specific incentives e.g. accelerated depreciation on food manufacturing equipment and Zero (0%) duty on green houses
•Planned revitalisation of refineries
• Increase Diaspora remittances via participation in the buyer support scheme for the Family Homes Fund
•Reduce demand for US Dollars
•Increase supply of US Dollars

4. Incentivise exports:
•Restructure the Export Expansion Grant (EEG) to a tax credit system
•Rationalise tariffs and waivers in key export sectors
•Encourage/incentivise non-oil exports
•Drive import substitution

5. Encourage investment in specific sectors through fiscal incentives:
•Accelerated depreciation on equipment in strategic sectors e.g. food processing, mining and power
•Rationalise tariffs and waivers in priority sectors
•Drive investment in strategic sectors

6. Continue expansion of fiscal space through revenue enhancement and cost consolidation:
•Customs Single Window (being implemented through a Private Public Partnership (PPP) scheme)
• Template for non-allowable expenses for government agencies.
• Overhead cost control by the Efficiency Unit
• Continuous risk based audit by the Presidential Initiative on Continuous Audit
• Revenue enhancement
•Cost containment

7. Improve fiscal discipline at Sub-National level:
•Extension of efficiency unit at Sub-National level
•Fast track municipal bond issues to deepen the bond market
•Conversion to International Public Sector Accounting Standards by all State Governments.
•Improved fiscal position at Sub-National level

8. Enable and accelerate Recoveries process:
• Whistle-blower scheme
• Centralised database on recovered assets
•Asset tracing
•Professional management of recovered assets
• Increased efficiency of Recoveries process
•Increased budgetary funding availability from Recoveries

9. Rebalance debt portfolio to extend maturity and optimise debt service cost:
•Rebalance public debt portfolio with increased external borrowing (60:40 target)
•Extend maturity profile of public debt portfolio
•Deploy long-term debt instruments including Infrastructure and Retail Bonds
•Maximise use of concessionary loans
•Rebalanced debt profile withimproved debt service to revenue ratio

10. Catalyse Micro, Small and Medium Enterprise (MSME) growth through specific measures to improve capacity and access to finance:
•Development Bank of Nigeria (US$1.3bn)
•Increase share of business awarded to MSMEs from Government contracts
•Tax harmonisation and tax incentives
•Accelerated depreciation

 

 

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0 Comments

  1. Roland Uchendu Pele

    December 11, 2016 at 10:26 am

    That CBN’ policy is the very reason we are in this mess. Whoever employed Emefiele must be high on cheap drugs. He single handedly crippled the economy

    • Nonso Ezeugo

      December 11, 2016 at 5:52 pm

      The efcc know there mission on this issue. So emefiele should enjoy for now and face the consequence later

  2. Margret Dickson

    December 11, 2016 at 11:15 am

    I think we’ve anticipated so much from this government than we are currently getting, we need to start seeing results and not plans

    • Amarachi Okoye

      December 11, 2016 at 5:55 pm

      That is what we want not by talking and project we not go on

  3. Johnson Amadi

    December 11, 2016 at 11:16 am

    Kemi Adeosun may have the best of ideas, but she’s not competent enough to actualize and bring the plans into reality

    • JOHNSON PETER

      December 11, 2016 at 11:57 am

      Then bring your father to come actualise the plans or your mother.

  4. yanju omotodun

    December 11, 2016 at 12:33 pm

    Let the 10 plans idea set to roll out with action immediately because Nigerians are groaning.

    • Balarabe musa

      December 11, 2016 at 7:24 pm

      Sure, the groaning is much. The economy is really seriously bad as I only drank garri once today and there is government . we need urgent revival of our economy.

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