National Economic Council agrees on eight (8) thematic areas of fiscal policy

Proshare

Wednesday, March 23, 2016 1.57PM/ News

 

The National Economic Council (NEC) 2-day retreat, driven by a singular focus on steps to address the troubled economy and the financial condition of the sovereign states has identified eight (8) thematic areas and seventy-one (71) specific proposals that signposts the economic policy direction of the President Buhari administration to reverse / rescue the economy from its current southwards trajectory.

The retreat which ended yesterday had in attendance the executive branch of the Federal Government of Nigeria, heads of relevant government agencies and the Government of the 36 states of the federation; and was chaired by the Vice President, Yemi Osinbajo.

 

At the end of the meeting with the theme: "Nigerian States: Multiple Centres of Prosperity",  “it was learnt that decisions covered areas such as agriculture, solid minerals, revenue generation and fiscal stability, infrastructure and services, investment, industrialisation and enabling monetary policies. Proposal were also made on the going-concern status of the states and on how to invest in the Nigerian people.”
 
A steering committee to implement the proposals, headed by Vice President Yemi Osinbajo was formed at the meeting. This committee will be complemented by an implementation monitoring committee headed by Zainab Ahmed, Minister of State for Budget and National Planning.
 
President Buhari, while delivering his opening address at the retreat, acknowledged the concerns of many when he said that “there is unanimity of opinion in Nigeria that the nation’s economy is in bad shape, adding that four key areas, namely agriculture, power, manufacturing and housing, require urgent attention to revive the economy”.
 

We share here, the eight (8) thematic areas and seventy-one (71) proposals ‘agreed’ upon which the NEC believes will reinvigorate the “stagflated” economy. 


Highlights:
 
Thematic Areas – Fiscal Structure 

1.       Agreement reached for concerted and consistent efforts to diversify revenue sources 

2.      Expand compliance on VAT, adopting a gradual plan for rate increase

3.      Increase expenditure through borrowing, which should be invested in infrastructure

4.      Federal and State Governments to focus on fiscal responsibility as a critical element in macro-economic balance 

5.      Increase investment in infrastructure through public private partnership (PPP)

6.      Develop financial inclusion strategies to cater for the poor and vulnerable population

7.      Maintain a minimum level of capital expenditure of 30% in the budget   

Thematic Areas - Agriculture 

8.     The Federal Government to re-position Bank of Agriculture to enhance its capacity to finance agriculture.

9.      Funding for Agricultural sector is considered critical and sources of intervention funding from the Central Bank of Nigeria should be considered

10.  A single digit interest rate for agricultural loans should be considered while duties and taxes for Agricultural products and equipment should be waived

11.   Develop strategic partnerships between Federal and State government. Each State should make specific commitments to crops in which it has comparative advantage and request Federal Government intervention

12.  National targets for self-sufficiency should be set for identified crops, which should be monitored. Tomato paste - 2016, Rice - 2018, Wheat - 2019

13.  The Federal and State Governments should roll out agricultural extension services nationwide

14.  The Commodity Exchanges should be established for price regulation and avoidance of losses due to lack of markets. The Abuja Commodity Exchange should be revitalised

15.   The National Agricultural Land Development Authority (NALDA) should be re-established

16.  Federal Government should develop an Agriculture Implementation plan whereby State Governments are encouraged to identify at least two crops in which they have comparative advantage

17.   States should open up of rural/feeder roads to facilitate transportation of agricultural produce to be supported by the Federal Government

18.  The Federal and State Governments should establish minimum price guarantee for farm produce

19.  The Federal Government should provide immediate funding to upscale efforts of Agricultural Institutes of Research and Development across Nigeria

20. State Governments should also be encouraged to fund research and development in agriculture through technical colleges, universities and research institutions     

Thematic Area - Solid Minerals   

21.  Ministry of Solid Minerals Development to complete and present the solid minerals development roadmap. This framework should address issues of illegal miner, licenses, taxes and royalties by 31st March 2016

22. Federal government to engage with state government on the roadmap and agree any amendment that may be required by 30th June 2016

23. Initiate relevant legislative changes that maybe necessitated by the agreed roadmap by 31stJuly 2016

24. Conclude the revalidation/recertification of all mining leases by 30th September 2016

25.  Agree with states and local government on respective responsibilities for developing feeder roads and other critical infrastructure for solid minerals development

26. Federal Government and States to set deadlines to achieve self-sufficiency in Bitumen/Asphalt and tiles (to discourage/stop importation)

27.  Make and communicate final decisions on operationalization of Ajaokuta steel plant by 30th June 2016

28. Establishment of joint committee to address issues of data on quantity and quality of minerals exploited and exported

29. Setting up of mining cadastral zonal offices for proximity to States for the purpose of issuing licenses and easy monitoring by States

30. Discourage use of wood for cooking by promoting use of coal briquettes

31.  Guarantee access to finance solid minerals development via intervention funds and private sector capital

32. Block revenue leakages in the sector through effective monitoring of activities in the mining sector

33. Organise artisanal/small-scale miners as a mechanism for reducing illegal mining and Establish Mines Surveillance Taskforce by September 2016 

Thematic Area - Investment, Industrialisation and Enabling Monetary policies 

34. Ministry of Industry, Trade & Investment (MITI) to develop a matrix of actions to be taken by Federal and State Governments towards achieving the targeted improvements in Ease of Doing Business ranking by 30th April 2016

35.  Present an incentive scheme for States taking actions towards improvement of the investment climate in their States including grants by 30th September 2016

36. Forge strong links between the Nigeria Investment Promotion Commission (NIPC) and the State Investment Promotion Agencies

37.  States to collaborate more actively on regional basis on investments and industrialization

38. The Federal Government should work with the States and other stakeholders to create an enabling environment for trade and investment through the implementation of the Nigerian Industrial Revolution Plan (NIRP) to encourage industrialization

39. Make environment conducive for the Micro, Small & Medium Enterprises to create jobs for the unemployed and undertake deliberate policies to create access to funds

40. State and Federal Governments must emphasize the patronage of "Made in Nigeria" products. "Import competition" rather than "import substitution" should be emphasized

41.  Governors to set up task forces to monitor implementation of trade/ investment policies and strengthen planning institutions by linking federal and sub-national planning; in this regard, a monthly meeting between the Minister of Budget & National Planning and State Commissioners for planning will be institutionalised

42. States to set up one-stop shop for investors where they do not currently exist to attract investment and improve on IGR Safeguard competitive market economy

43. Promote regional cooperation on investment and industrialisation

44. Implement institutional and structural reforms as a way of improving the efficacy of monetary policy including greater consultation with the National Economic Council

45.  Predictability and consistency of the Central Bank of Nigeria's communication to key stakeholders is required to manage expectations

46. The Central Bank of Nigeria should carry the States along in some of their reforms in areas of SMEs and Agricultural funding initiatives

47.  Long-term development goals should anchor policy decisions

48. Effective regulation & supervision to improve confidence in the soundness and stability of the banking system   

Thematic Area - Infrastructure and Services    

49. Develop infrastructure delivery plan considering current financial capabilities driven principally by the goal of improvement of the quality of life for the populace

50. Develop financing model for infrastructure projects

51.   Integrate training and job creation components in infrastructure projects

52.  Implement empowerment and entrepreneurship policies to foster inclusive growth 

Thematic Area - Investing in our people    

53.  Federal and State Governments to work collaboratively to ensure sustainability of the school feeding and other social protection programmes

54.  Cooperation from the States' Ministries of Education and State Universal Basic Education Board (SUBEBs) for the Teacher Corp program

55.  Provide logistics support on the proposed upgrade of 75 existing National Directorate of Employment (NDE) facilities (across the various States) to Empowerment Centers

56.  Cooperation and coordination with the States on their specific job creation efforts

57.  State Government support on identified needs such as infrastructure and/or space for innovation hubs

58. State Government support for artisan training, scoping and support for existing artisan cultures, use of existing training facilities

59.  Institutionalize a single register as a platform for targeting the authentic poorest and vulnerable for safety net programs; for government, donor agency, organizations or individuals

60. Creating a delivery mechanism that ensures efficient, consistent timely and direct payments in the remotest parts of the country

61.  Boost productivity and financial inclusion for the poorest and most vulnerable    

Thematic Area - Revenue Generation and Fiscal Stability    

62. There is need for deliberate effort to generate relevant data on the respective economies of the states and the nation generally in order to drive revenue generation

63. FIRS and SIRS need to invest in relevant technology to support efforts to improve tax collection

64. There is a need to develop incentive schemes for federal and state revenue generating agencies

65.  FIRS and SIRS need to actively collaborate on initiatives to improve tax collection, including joint audits of major corporate tax payers

66. All state governments are encouraged to establish efficiency units to review/enhance the quality of expenditure as well as plug revenue leakages

67.  Focus on property and consumption taxes will help in improving revenues in a fair manner

68. Tax-payer education should be intensified to expand the tax base and avoid political back-lash from intensifying tax collection

69. State Government are encouraged to rationalise number of Ministers, Commissioners and Permanent Secretaries

70. Cost control measures should be identified and implemented on an ongoing basis; in this regard various examples from Nigeria and other countries are recommended

  

Thematic Area - Survival of States and Beyond   

71.   Strengthen States Peer Review Mechanism under auspices of the Governors Forum and the National Economic Council (NEC) to promote sharing of good practices between the Federal and States Governments

 

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