Federal government’s fiscal reforms and challenges ahead


In a compelling revelation, the chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr Taiwo Oyedele, unveiled that the federal government is poised to save a substantial N8 trillion annually through the removal of fuel subsidies and exchange rate unification policies.

Addressing a panel session at the Lagos Chamber of Commerce and Industry’s 2024 Economic Outlook and Budget Analysis, Oyedele stressed the necessity of purposefully utilizing these savings to alleviate the plight of the average Nigerian.

The reported N4 trillion annual savings resulting from the fuel subsidy removal and an additional N4 trillion from the naira floatation underscore the magnitude of the fiscal changes.

Oyedele’s call for intentional spending aligns with the mandate of Finance and Business Online Publishers (FiBOP), urging the government to channel these funds to positively impact the lives of the populace, especially addressing multidimensional poverty affecting over 133 million Nigerians.

FiBOP recognises the urgency highlighted by Oyedele to create digital opportunities for the youth, emphasizing Nigeria’s capacity to generate $20 billion annually from the technology sector. This aligns with the committee’s stance on leveraging the potential of the tech industry to drive economic growth and address unemployment challenges.

The call to suspend “nuisance taxes” by Oyedele resonates with FiBOP’s advocacy for a more conducive business environment. These taxes, deemed frustrating to both businesses and citizens, warrant reconsideration to promote economic growth.

Oyedele’s emphasis on promoting exports, including services and intellectual property, aligns with FiBOP’s vision for diversifying the economy. Focusing on exporting services and intangibles can contribute significantly to economic growth and reduce dependence on traditional goods.

The revelation concerning diaspora remittances highlights existing loopholes that hinder the full impact of these funds on the Nigerian economy. FiBOP supports the call to address these loopholes, ensuring that the majority of remittances arrive in foreign currencies, benefitting both the diaspora and the nation.

The director general, Budget Office, Mr Ben Akabueze, expressed concerns about the country’s persistent budget deficits and rising debt profile. FiBOP acknowledges the fiscal challenges and emphasizes the need for prudent fiscal management, including raising public revenues to meet the increasing demand for public goods and services.

The CEO of Financial Derivatives, Mr Bismarck Rewane, outlined key economic challenges facing Nigeria, including non-inclusive growth, rising income inequality, high poverty, unemployment rates, inflation, fiscal imbalances, and currency pressures. These challenges, as identified by Rewane, align with FiBOP’s commitment to providing comprehensive analyses that contribute to informed economic discussions.

As FiBOP continues to monitor and analyse these fiscal developments, the committee remains dedicated to advocating for sound fiscal policies that foster economic growth, transparency, and inclusivity.