The declaration of a state of emergency on the country’s revenue generation has been advised by President Bola Ahmed Tinubu’s Policy Advisory Council. Inorder to facilitate the effective collection of all direct and indirect taxes, as well as levies on behalf of the Federal Government, the council also suggested merging the Federal Inland Revenue Service, the Nigerian Customs Service, and the Nigerian Maritime Administration and Safety Agency into the Nigerian Revenue Service.
The National Economy Sub-Committee’s submissions state that the Emergency Economic Reform Bill, which will give the President special authority to lead the economic reform agenda and support the delivery of inclusive and sustainable economic growth, will help the policy.
The council further outlined targets to be pursued by the President in order to achieve some milestones within the first 100 days in office, including the elimination of fuel subsidies, sale or concession of specific government assets, change to a transparent and unified foreign exchange rate system, deepening tax collection, and optimization of operating expenditure to reduce costs.
Senator Tokunbo Abiru, who serves as the council’s chair, Dr. Yemi Cardoso, Sumaila Zubairu, and Dr. Doris Anite are the other members. Our correspondent on Friday was able to get a copy of the report that the panel had submitted.
The council’s report, which focuses on fiscal and monetary policies, industry, trade, and capital market reforms, stressed that adjustments to the Central Bank of Nigeria and temporary increases in fiscal circuit breakers like debt limits would aid in achieving N1 trillion in GDP growth and more than 50 million jobs for citizens in eight years.
In addition, it was suggested in the 90-page document that CBN reforms would enable the CBN to accumulate external reserves of between $50 billion and $60 billion, with a monthly inflow of between $6 billion and $8 billion from export earnings and other sources of capital inflow to support the policy at a N500–N600/$ exchange rate.
The council provided guidance on the fiscal policies that should be put in place, emphasizing the need to increase domestic refining capacity to two million barrels per day while fostering economic opportunity for the host communities.
In addition, they suggested non-cash palliatives for low-income earners for up to a year as one-time personal income tax reliefs to lessen the impact of the removal of fuel subsidies.
The advice stated: “Grow crude oil revenue and savings into ECA and NSIA and ramp up production capacity from offshore and onshore assets to four million barrels within four years.
“Formalize unauthorized refineries and support modular refineries to bring economic opportunity to the host communities.
“Grow domestic refining capacity aggressively to 2 million barrels per day in the following eight years, including modular refineries.
“A policy directive that ensures proceeds from the sale of assets to settle existing FGN debt obligations” is one of the other fiscal suggestions that have been put forth.
“Give a list of the profitable and strategic subsidiaries of NNPC. To generate liquidity in the short to medium term, privatize, concession, or sell down FGN’s stake in corporate assets to partners and other investors (possibly with a buyback option) (focus on underperforming assets, e.g., the NNPCL refineries).
“Utilize blockchain to establish a government land registry, make it accessible, and regionalize and concession the power transmission grid.
In order to address any potential cash shortages, the advisory council also suggested extending the use of the old naira until December 2024.
It also suggested gradually replacing old notes with new ones through deposit money banks at a rate of 5% per month.
They advised, “Extend the December 31, 2023 deadline to December 31, 2024 (if necessary), and bring in new notes through deposit money banks by 5% monthly and remove old notes through deposit money banks by the same 5% to address the cash shortage. ”.
The policy continued, “To transform Nigeria into Africa’s most efficient trading nation, decongest the area up to 4km around the ports and designate them for cargo, roads, and railway, enforce the Presidential directive on 48hr clearance of goods at seaports in accordance with Executive Order 001, redefine the performance measures of key agencies of government to emphasize trade facilitation, and set up a whistle-blowing mechanism that enables and empowers transporters to repo goods.
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