Tuesday, January 20, 2019 / 7:07 AM /
Ottoabasi Abasiekong for WebTV / Header Image Credit: WebTV
In a recent brief interview with financial analyst and CEO Financial Derivatives Company (FDC), Mr. Bismarck Rewane, on the implications of the 2019 Finance Bill on the Inflationary rate in 2020, Mr. Rewane pointed out that inflation may climb down a few notches in the year.
He was of the view that with the implementation of the revised Value Added Tax regime from 5% to 7.5%, the bill will strengthen the fiscal position of state governments in the country.
It will also lower the borrowing requirements of the governments, especially at the sub-national levels.
Rewane, however, pointed out that raising revenue and reducing dependence on domestic and foreign borrowings to finance the government's budget would put downward pressure on inflations and represent anti-inflationary action.
He said noted that the new bill would require citizens to hold the government accountable in how it deploys state resources. The member of the Presidential Economic Advisory Council said the government has a role to play in investing heavily in infrastructure to drive productivity.
"When there is productivity, it will lead to high growth, and thus a fall in Inflation," Rewane said.
Nigeria's current GDP growth rate is 2.28% while its recent inflation rate released by the National Bureau of Statistics, NBS, for December 2019 moved up to 11.98%.
According to the Finance Minister Mrs. Zainab Ahmed, the new VAT regime under the Finance Bill provisions will take effect from February 1, 2020.
December 2019 Inflation Rate