The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has revealed that the Nigerian government stands to save N8tn annually from the removal of fuel subsidies and the unification of exchange rates. Speaking at a panel session during the Lagos Chamber of Commerce and Industry’s 2024 Economic Outlook and Budget Analysis, Oyedele emphasized the importance of directing these savings towards alleviating the hardships faced by the average Nigerian.
According to Oyedele, the removal of fuel subsidies results in an annual savings of N4tn, coupled with an additional N4tn from the naira floatation. He urged the government to be intentional in utilizing this N8tn to positively impact the populace, focusing on addressing multidimensional poverty that affects over 133 million people in Nigeria. The committee aims to establish a platform to monitor the spending of these funds effectively.
In addition, Oyedele recommended the suspension of certain taxes labeled as “nuisance taxes” that impede economic activities and fail to contribute significantly to government revenue. He stressed the urgency of creating digital opportunities for the country’s youthful population, suggesting that Nigeria has the potential to generate $20bn annually from the technology sector.
Furthermore, the committee urged the promotion of exports, including services and intellectual property, emphasizing the need to tap into the $20bn diaspora remittances recorded in 2023. Oyedele highlighted the importance of addressing loopholes in the system that allow middlemen to divert foreign currencies meant for recipients, suggesting amendments to existing laws.
Director General of the Budget Office, Ben Akabueze, expressed concern about the country’s historical reliance on deficit budgets, resulting in a growing debt profile. He emphasized the need to raise public revenues and address the low public revenues against the backdrop of increasing demands for public goods and services.
Bismarck Rewane, CEO of Financial Derivatives, highlighted key economic challenges facing Nigeria, including non-inclusive growth, income inequality, high poverty and unemployment rates, inflation, fiscal imbalances, and currency pressures. He attributed the forex crisis to factors such as lack of transparency, unclear policy direction, ineffective price discovery measures, capital controls, inefficiency, and high speculation and arbitrage activities.
