Friday, February 12, 2021 / 4:34PM / Bukola Akinyele-Yisau for WebTV / Header
Image Credit: WebTV
The Diversification of Nigeria's Revenue Base from dependency on crude oil is a crucial step Nigeria must take to achieve sustainable economic growth and stability.
This point was made at a public dialogue hosted by Deloitte Nigeria which discussed the "Journey to Economic Recovery: Expectations for 2021". The event was an opportunity to examine Nigeria's strategies and policy steps required to building a resilient economy, amidst a recession and the challenge of the COVID 19 pandemic.
In his opening address, the West Africa CEO, Deloitte, Mr. Fatai Folarin said the global economic challenge shaped by the COVID-19 pandemic, brought to the fore the need for adjustments.
According to him building a resilient Nigerian economy requires effective measures by the government, through policy initiatives that cater to the indigent.
Reviewing the Federal Government of Nigeria's 2021 budget estimated at N13.6trn, he described it as aggressive with a deficit of N5.7trn that provides opportunities for financing the fiscal gap.
On the 2020 Finance Act, Mr. Folarin believed it was dynamic and innovative, with the capability of creating an enabling environment for businesses in the country.
Delivering the keynote focusing on "Economic Direction for the year by reviewing Monetary Policies, Fiscal and Regulatory Policies" Minister of Finance, Budget and National Planning Dr. (Mrs) Zainab Ahmed commended Deloitte for its support in developing the "Strategic Revenue Growth Initiative".
She informed stakeholders that the Nigerian economy is on the path of recovery, and is anchored on several government policies and intervention programmes like the Economic Recovery and Growth Plan (ERGP), Economic Sustainability Plan (ESP), and the current accommodative monetary policy of the Central Bank in response to the pandemic.
Other initiatives she highlighted include;
Speaking further she said the Strategic Revenue Generation Initiative and Finance Act 2020 will aid the economic recovery process of the economy. She believed the initiative will grow the level of fiscal revenue, improve the ease of doing business, counteract the impact of oil price fluctuations, and integrate fiscal, monetary, and trade policies.
"The SRGI will help to achieve sustainability in revenue generation, identify and enforce new and existing revenue streams, and achieve cohesion through people and tools," She said.
The Minister informed the forum that the FG is planning the Strategic Revenue Growth Initiative 2.0 which will emphasize tax compliance.
She concluded her presentation by restating that the federal government remains focused on economic policies aimed at improving revenue generation, enhancing economic competitiveness, attracting foreign direct investments, and ensuring the overall sustenance of macroeconomic stability.
The Managing Director, Emerging Markets and Africa, Deloitte, Dr. Martyn Davies in his presentation on the "Economic Outlook 2021: Global, Africa, and Nigeria" called on African countries to drive the growth agenda, rather than rely on fluctuating commodities prices.
He highlighted four scenarios for 2021 which are Hard rain, A new dawn, Endless winter, and Sun showers. According to him, the four scenarios are based on two critical uncertainties that will likely shape the future, the government response to the pandemic and its economic consequences, and the levels of vaccine distribution and adoption.
According to Martyns, in 2020 only 11 countries in Africa showed positive growth and in terms of correlation and causation, the growth situation in China underpinned the economic activities of commodity-based countries like Nigeria.
He decried the fact that Nigeria is extremely dependent on one commodity (crude oil) which is unhealthy from an economic and sustainability perspective.
The analyst tasked Nigeria on diversifying its revenue from crude oil dependence, through manufacturing that could create employment opportunities and drive industrialization.
The webinar featured a panel session on "Building a Resilient Economy for the Future" and was moderated by the West Africa, International Tax & Services Leader Mr. Oluseye Arowolo.
The International Monetary Fund Resident Representative in Nigeria Mr. Ari Aisen one of the panelists in his remarks said the ability to be resilient as an economy hinges on a robust policy approach
He said the monetary policy stance in Nigeria was appropriate because the Central Bank of Nigeria, was taking the right steps by increasing the credit line to the private sector.
Aisen added that greater attention from the CBN should be placed on inflation and the challenges of the balance of payment issues.
The West African Tax Leader, Deloitte, Mr. Yomi Olugbenro in his comments, called for the optimization of the tax collection processes and the leveraging of technology for transparency in Nigeria.
Speaking about the tax landscape he made a strong point for the periodic review of the Nigerian Finance Act.