The Federal Government of Nigeria has unveiled its blueprint for addressing the challenges posed by excess liquidity in the financial system, combat inflation, and foster economic stability.
The blueprint was released by the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, during a briefing at the ongoing Spring Meetings of the International Monetary Fund (IMF) and World Bank in Washington DC.
Edun affirmed the government’s dedication to tackling the issue of surplus money circulating within the economy, stating, “We are determined to identify ways to alleviate the pressure of excess money in the system.” This approach, he explained, aims to foster collaboration between fiscal and monetary authorities to mitigate inflationary pressures and stabilize the exchange rate.
Highlighting the urgency of the situation, Edun emphasized the need to reduce reliance on borrowing and instead focus on domestic resource mobilization. He pointed out Nigeria’s tax-to-GDP ratio of 10 percent as insufficient compared to regional averages, indicating the necessity for comprehensive tax reforms.
“With a tax-to-GDP ratio of 10 percent, what should I say? It would appear as if some people are not paying their taxes,” remarked Edun, stressing the importance of leveraging technology and policy reforms to enhance tax collection efficiency.
The Minister outlined plans to simplify the tax system by consolidating revenue streams to maximize returns from key tax categories, with the aim of doubling tax revenue within three years. “If we eliminate the multitude of taxes and accurately bill people, we will see an increase in people’s willingness to pay and ultimately collect more revenue,” Edun stated, advocating a strategic overhaul of the tax framework to enhance compliance and increased revenue generation.
Furthermore, Edun mentioned that the government is addressing agricultural challenges exacerbated by insecurity, which hinders farmers’ access to their farms. He noted collaboration with organizations such as the African Development Bank (AfDB) to establish agro clusters aimed at boosting food production nationwide.
