Economy

President Tinubu Unveils Ambitious Roadmap to Catapult Nigeria’s Economy to $1 Trillion

President Bola Tinubu has unveiled an ambitious roadmap aimed at propelling Nigeria’s economy to an unprecedented milestone of $1 trillion.

Published

4 months ago

June 16, 2023

Investors King

President Bola Tinubu has unveiled an ambitious roadmap aimed at propelling Nigeria’s economy to an unprecedented milestone of $1 trillion.

The comprehensive plan, announced by the Policy Advisory Council, outlines a series of strategic initiatives designed to drive sustainable economic growth and address key challenges hindering Nigeria’s progress.

With a resolute determination to transform the nation’s economic landscape, President Tinubu acknowledged the enormity of the task at hand during the meeting of the National Economic Council (NEC). Addressing the state governors, he emphasized that the responsibility of growing the economy falls upon all who campaigned, danced, and begged for this job.

The Policy Advisory Council, consisting of experts from various sectors, including banking, finance, and politics, has identified a consistent average annual GDP growth rate of seven percent as a vital target for Nigeria’s economic transformation. The roadmap encompasses a comprehensive approach that spans fiscal policy, monetary policies, the capital market, and the industry and trade sectors.

Under the fiscal policy reforms, the government aims to tackle issues such as oil theft and pipeline vandalism while significantly boosting oil and gas production. The plan includes rationalizing selected government assets, restructuring and automating revenue-generating agencies for more efficient tax collection, and optimizing operating expenditure to reduce costs and leakages. Additionally, the policy outlines the impending elimination of the PMS subsidy, which has already come into effect since President Tinubu’s inauguration.

In terms of monetary policies, the roadmap focuses on transitioning towards a transparent and unified foreign exchange rate system. It also aims to resolve the cash shortage situation that impacted the economy in early 2023 due to the naira redesign under the previous administration.

The establishment of a coordinating body for fiscal and monetary policies, along with reforms in the operating model of the Central Bank of Nigeria, will foster stability and facilitate economic growth. The policy also sets ambitious targets for exchange rates, interest rates, and inflation rates.

The capital market plays a crucial role in the roadmap, with the government planning to issue long-term, high-yielding debt securities, such as special purpose bonds. These funds will be allocated to dedicated projects in key sectors like agriculture and industry. Furthermore, the government aims to encourage increased participation of pension funds and insurance companies in the capital market, which will enhance liquidity and drive sustainable economic development.

Recognizing the significance of a business-friendly environment, the roadmap emphasizes regulatory reforms to attract investments and boost the manufacturing sector’s contribution to GDP. Nigeria aspires to become Africa’s most efficient trading nation, increasing the share of non-oil exports in GDP. The goal is to position the country as the top investment destination among the MINT economies, which include Mexico, Indonesia, Nigeria, and Turkey. These reforms will pave the way for job creation, inclusive growth, and a thriving economy.

President Tinubu’s economic vision extends beyond achieving a $1 trillion economy. The Policy Advisory Council has set ambitious targets to uplift the lives of Nigerians. The roadmap aims to lift 100 million people out of poverty, generate over 50 million jobs, and deliver sustained inclusive growth. The government is also committed to reducing the unemployment rate from 33 percent to 17 percent within eight years and creating 7.2 million jobs by 2030.

As Nigeria embarks on this transformative journey, the world eagerly awaits the realization of President Tinubu’s ambitious roadmap. With a comprehensive plan in place and a resolute determination to succeed, Nigeria is poised to unlock its immense potential, attract global investments, and emerge as a thriving economic powerhouse in the coming years.

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Economy

August 2023 Witnesses Highest Revenue Allocation of the Year – N1.1 Trillion Shared

The driving force behind this boost in revenue can be attributed to foreign exchange gains that have contributed significantly to the government’s income stream.

Published

2 days ago

September 30, 2023

Temitayo Olukoya

The Federation Account Allocation Committee (FAAC) unveiled its allocation of N1.1 trillion to the three tiers of government for the month of August 2023, Investors King reports.

This substantial increase was detailed in a communiqué following the committee’s latest meeting. August allocation was the highest so far with an increase of N133.99 billion when compared to the N966.11 billion shared in July 2023.

The driving force behind this boost in revenue can be attributed to foreign exchange gains that have contributed significantly to the government’s income stream.

Breaking down the N1.1 trillion total distributable revenue, the statement reveals that it consists of distributable statutory revenue amounting to N357.4 billion, distributable Value Added Tax revenue totaling N321.94 billion, Electronic Money Transfer Levy revenue at N14.10 billion, Exchange Difference revenue of N229.57 billion, and an augmentation of NN177.09 billion.

Of this impressive sum, the Federal Government is set to receive N431.25 billion, while the State governments will be allocated N361.19 billion, and the local government Councils will obtain N266.54 billion.

However, it’s essential to note that the total revenue available for August stood at N1.48 trillion, marking a 14% or 0.26 trillion decrease from the preceding month’s figure of N1.74 trillion.

The FAAC communiqué further underscores that various deductions were made, including N58.76 billion for the cost of collection, N254.05 billion for total transfers and refunds, and N71 billion allocated to savings. Additionally, the Excess Crude Account maintained a balance of $473,754.57.

The statement elaborated, “Gross statutory revenue of N891.934 billion was received for the month of August 2023. This was lower than the N1,150.424 billion received in July 2023 by N258.490 billion. The gross revenue available from the Value Added Tax was N345.727 billion. This was higher than the N298.789 billion available in July 2023 by N46.938 billion.”

Economy

Zambia’s Finance Minister Faces Dual Challenge in Upcoming Budget Address

Published

3 days ago

September 29, 2023

Samed Olukoya

As Zambia’s Finance Minister, Situmbeko Musokotwane, prepares to present the nation’s budget, he finds himself at a pivotal crossroads.

The second-largest copper producer in Africa is grappling with two pressing concerns: debt sustainability and soaring living costs.

Debt Restructuring Dilemma: Musokotwane’s foremost challenge is finalizing the $6.3 billion debt-restructuring deal with official creditors, led by China and France.

Delays have hindered disbursements from the International Monetary Fund (IMF) and left private creditors in limbo.

To reassure investors, a memorandum of understanding with the official creditor committee is urgently needed.

President Hakainde Hichilema emphasizes the importance of sealing these transactions to signal closure on this tumultuous chapter.

Plummeting Tax Revenue: The key copper-mining industry, which accounts for 70% of Zambia’s export earnings, is in turmoil.

First-half mining company taxes and mineral royalty collections have nosedived, adding to economic woes.

This, in turn, has depreciated the local currency, exacerbating imported inflation, particularly in fuel prices.

Rising Food Inflation: Musokotwane faces mounting political pressure to combat soaring living costs, with annual inflation reaching an 18-month high of 12%. Corn meal prices, a staple in Zambia, have surged by a staggering 67% in the past year.

Neighboring countries’ demand for corn has led to smuggling and further price spikes, raising concerns about food security.

Currency Woes: The kwacha’s value has been a barometer for the nation’s economic health. It depreciated by 16% since June 22, the worst performance among African currencies, reflecting the ongoing debt-restructuring uncertainty.

In his budget address, Musokotwane faces the daunting task of striking a balance between debt management, economic stability, and alleviating the burden on Zambia’s citizens.

The international community will keenly watch to see if his fiscal measures can steer the nation toward a path of recovery and prosperity.

Economy

IMF Urges Sub-Saharan African Nations to Eliminate Tax Exemptions for Fiscal Health

Published

4 days ago

September 28, 2023

Samed Olukoya

Sub-Saharan African countries have been advised by the International Monetary Fund (IMF) to tackle their fiscal deficits by focusing on eliminating tax exemptions and bolstering domestic revenue rather than resorting to fiscal expenditure cuts, which could hamper economic growth.

The IMF conveyed this recommendation in a paper titled ‘How to avoid a debt crisis in Sub-Saharan Africa.’

The IMF’s paper emphasizes that Sub-Saharan African nations should reconsider their overreliance on expenditure cuts as a primary means of reducing fiscal deficits. Instead, they should place greater emphasis on revenue-generating measures such as eliminating tax exemptions and modernizing tax filing and payment systems.

According to the IMF, mobilizing domestic revenue is a more growth-friendly approach, particularly in countries with low initial tax levels.

The paper highlights success stories in The Gambia, Rwanda, Senegal, and Uganda, where substantial revenue increases were achieved through a combination of revenue administration and tax policy reforms.

The IMF also pointed out that enhancing the participation of women in the labor force could significantly boost Gross Domestic Product (GDP) in developing countries.

The IMF estimates that raising the rate of female labor force participation by 5.9 percentage points, which aligns with the average reduction in the participation gap observed in the top 5% of countries during 2014-19, could potentially increase GDP by approximately 8% in emerging and developing economies.

In a world grappling with the weakest medium-term growth outlook in over three decades, bridging the gender gap in labor force participation emerges as a vital reform that policymakers can implement to stimulate economic revival.