Finance ministry moves to rejig sluggish economy

The Ministry of Finance, Budget and National Planning has announced five areas of priority focus based on the Federal Government’s strategic plans to revamp Nigeria’s ailing economy and achieve inclusive growth.

The fiscal authority said it would focus on enhancing revenue generation, collection and monitoring, accelerating fiscal consolidation by optimising priority capital and recurrent expenditure, and optimising management of both domestic and global fiscal risks.
Other focus areas, the ministry said, are increased coordination of fiscal, macro monetary and trade policies, and integrating annual budgets and medium-term fiscal strategies into medium and long-term national plans.
In a document seen by BusinessDay, the ministry hinged its plans on the 11 priority areas by the Federal Government (FG) which were captured under three broad themes, including accelerating economic and governance reforms, enhanced investment in physical infrastructure, human capital, and optimising investment in physical security and food security.
To enhance revenue generation, the ministry has launched a Steering Committee to identify new sources and enhance existing revenue streams, while improving the coordination and cohesion among agencies in the revenue ecosystem using relevant tools.
It also announced that the reconstituted National Tax Policy Implementation Committee (NTPIC) – under the chairmanship of executive chairman, Federal Inland Revenue Service (FIRS), and the comptroller- general of Nigeria Customs Service – has been directed to produce a single draft Finance Bill 2019 to support the fiscal priorities of Nigeria’s 2020 budget.
Other reforms in the pipeline include enhancing the ease of doing business, particularly for Medium Small and Micro Enterprises (MSMEs), through a reduction in corporate rate for businesses with N25m turnover from 30 percent to 20 percent, reduction of Value Added Tax and corporate tax filing requirement for MSMEs, and a one percent tax rebate for early-bird taxpayers.
To bridge the huge infrastructural deficit, the ministry plans to incentivise investment in infrastructure and revive capital markets growth through targeted tax incentives, encourage multi-million private sector investment in real estate through Real Estate Trusts (REITs), and introduce tax rules to complement existing SEC regulations for securities lending transactions on the Nigerian Stock Exchange.
According to the ministry, the Presidential Infrastructure Development Fund (PIDF) has expended over N17bn out of N2.5trn targeted for major roads across the country. These include Lagos-Ibadan Expressway, Second-Niger Bridge project, Abuja-Kano Expressway, and Mambilla Hydropower project.
The ministry also said it would through N500bn continue to prioritise the social intervention programme.
On debt management reforms, the finance ministry noted that government is committed to achieving optimal debt balance, noting that the government is on track to shift domestic debt portfolio to long-term maturities while proceeds from the borrowing are being targeted at capital spending priorities.
On the controversial P&ID judgment, the ministry is considering various available options – setting aside an earlier judgment based on proof of fraud by filing fresh actions against the claimant, negotiations and out-of-court settlement.
As part of its priority, the focus would be on increased coordination of Nigeria’s fiscal, macroeconomic, monetary and trade policies, the ministry said.
The ministry would also be integrating annual budgets and Medium-Term Fiscal Strategies into rolling Medium and Long-term National Plans.
It said Nigeria’s 2017-2020 Economic Recovery and Growth Plans (ERGP) targets investments in critical infrastructure and human capital development as well as enhancing food security, fostering industrialisation, creating jobs and facilitating the ease of doing business.
Key policies include macroeconomic stability and economic diversification, social inclusion and job creation, youth empowerment, and improved human capital development.
The Federal Ministry of Finance, Budget, and National Planning noted it is working with minister of state for budget and national planning to undertake the visioning exercise for long-term vision 2040 plan and prepare Medium-Term Economic Growth Acceleration plan for 2021-2024 as a successor to ERGP.
The ministry said it had learned from recent oil price boom and bust and Nigeria’s failure to plan for external shocks which led to the 2016 recession.
It said the government remains committed to executing the ERGP’s priorities and programmes, mindful of economic headwinds and committed to accelerating the ERGP to deliver on its socio-economic and development agenda.
The ministry also highlighted the 2020 budget preparation, the document which last week the Senate adjusted to N10.729 trillion on expectations of a higher oil price than the Ministry of Finance, Budget and National Planning had designed the budget on.
The lawmakers also passed the 2020-2022 Medium Term Expenditure Framework and Fiscal Strategy Paper, approving 16 recommendations made by the National Assembly Joint Committees on Finance and National Planning.