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Why Investing in Education Is Key For Entrepreneurship - Adedipe, Awoyemi, Agboluaje, Olugbenro

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Friday, January 25, 2019  03.00PM / Bukola Akinyele for Proshare WebTV

 

At the 2019 Federal Government of Nigeria Budget workshop, hosted by the Chartered Institute of Taxation of Nigeria (CITN), Mr Olufemi Awoyemi, FCA the CEO of Proshare emphasized the need for the country to invest in education and entrepreneurship, to achieve a productive economy.

Speaking on the topic “Fiscal Projections of the 2019 Budget: Challenges and Prospects” Mr Awoyemi said educational spending would pay its way,  raising Nigerian Workers to higher levels of income which would eventually be taxed at higher marginal rates. On the other hand entrepreneurs with better skills and larger visions will generate higher revenues.


Table 1 FGN 2019 Budget assumptions

S/N

Description

FGN Budget 2019 Assumptions

1

GDP growth rate (%)

3.01%

2

Oil Production (mbpd)

N2.3mln

3

Oil Price (US $)

$60bpd

4

Inflation rate (%)

9.98%

5

Exchange rate (N/$)

N305/$

6

Nominal Revenue (N)

N8.826trn

7

Nominal consumption (N)

N119.28trn

8

Nominal GDP (N)

N139.65trn

Source: FGN 2019 Budget figures

 

This according to him will produce more tax earnings for the government, by way of higher Company Income Tax and Personal Income Tax. 

He noted that Nigeria needs to educate people to make them productive, Awoyemi pointed out that productive people will be healthy, secure, and have roofs over their heads. 

He explained further that the paltry 7% allocated to the education sector in the 2019 budget clearly reveals the lack of radical reasoning amongst economic managers in the country. 

In comparison the analyst noted that Ghana, Nigeria’s neighbor spends about 23% of its budget on education thereby explaining why rich Nigerians spend about a $1billion annually training their children in that country. 

Assessing the budget, Awoyemi was of the view that it did not in any creative way address the challenges of rising unemployment. 

Nigeria’s unemployment figure in Q3 2018 was estimated at 23.1%. 

“The economy has grown the absolute number of unemployed people by 15million in the last three years, meaning that an average of 5 million new jobs need to be created annually to keep unemployment rate at its present level.  To do this the economy must grow by between 5 and 6% per annum slightly lower than India’s recent 7% growth rate in 2018 (Nigeria’s recent growth rate was 1.81% in Q3 2018)” he said. 

Looking at Rwanda and Ethiopia he highlighted the fact that both countries, who are not oil-producers, invested heavily in human capital development which has led to their remarkable economic transformation. 

He also used the Late Chief Obafemi Awolowo (former Premier of the then Western Region of Nigeria) as an example of a leader who invested in education,  transforming the entire region.

 

ILLUSTRATION

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Source: Olufemi Awoyemi’s Treatise on the Awolowo Model

 

Recalling the growth rate in both Ethiopia and Rwanda (two countries listed in the top 10 fastest growing economies for 2019 by the International Monetary Fund) human capacity development is crucial to ensuring sustained and exceptional growth rates. 

Awoyemi asserted that there must be a correlation between education and productivity in Nigeria. 

In a panel session to discuss the paper presentation, Yomi Olugbenro Head Tax, West Africa at Deloitte opined that the budget will be impacted by the challenge of revenue. 

According to Yomi, Nigeria needs a revised structure for long term capital expenditure covering areas critical to productivity. 

Olugbenro also noted that the failure to approve the Federal Budget early over the years, negatively impacted the nation’s economy.

 

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Additional References

Ogun Standard Education: A Way Forward – Olufemi Awoyemi, Proshare  - May 23, 2017 


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