IMF speaks on relationship between Nigeria’s tax base and infrastructural needs

Nigeria has been advised to widen its tax revenue base to fund infrastructural projects and social development programs capable of spurring growth in the nation’s economy.

Abebe Aemro Selassie, Director of the Africa Department of the International Monetary Fund (IMF) in an interview at the ongoing annual meetings of the World Bank Group and IMF holding in Washington, noted that though the President Muhammadu Buhari-led administration has made some giant strides in the fight against corruption, the nation needs to utilize its reform efforts to boost economic growth.

Selassie, while explaining the endless opportunities the widening of revenue tax base could portend for the country, pointed out that increased tax bases is indispensable, “To address the education, health, road, electricity, and other infrastructural needs they have, they have to have a much higher revenue tax base than they do now, ” he said.

He also urged the country to get rid of its system of multiple foreign exchange rates and move to a single unified exchange rate.

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Nigeria had maintained several different foreign exchange windows aimed at serving different purposes to different categories of people or bodies, amongst the rates are the official rate, the black market rate, Nafex window for investors and special rates for religious bodies on pilgrimage.

While commending the government for narrowing the gap between the parallel market and the official market, he said “the country would strongly benefit from having a unified and liquid single foreign-exchange market.”

Nigeria economy officially plunged into recession in 2016 after the crash in the global crude oil prices in 2014 which also battered the economy of several oil exporting nations in Africa. However, Nigeria economy has begun to recover for the economy woes, IMF projected the economy will grow 2.1 percent this year and 1.9 percent in 2019.

By Oliuwasegun Olakoyenikan….

 

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