IMF Urges Nigeria To Remove Subsidy, Raise Taxes

Nigeria needs to deepen its drive in subsidy reforms and improve tax administration to achieve its development need, the International Monetary Fund (IMF) has said.
The IMF executive board handed down this advice to the Nigerian government at its 2011’s Article IV consultation with Nigeria held on February 22, 2012.

A public information notice issued by the IMF yesterday detailed a list of what it said were its conclusions on the Nigerian economy based on its assessment.

The fund said it supported the (Nigerian) authorities’ strategy to rebuild fiscal buffers through a better prioritization of public expenditure, continued subsidy reform, and improved tax administration,” and that “efforts in these areas will also provide the necessary resources for targeted social programmes and needed infrastructure.”

However, it called for further devaluation of the naira for price stability. “Greater exchange rate flexibility will also facilitate the pursuit of price stability,” it said and that the fund “supported the central bank’s focus on strengthening supervision and the regulatory framework, including addressing the remaining deficiencies in the Anti-Money laundering/Combating the Financing of Terrorism regime.

It voiced support for the establishment of the Sovereign Wealth Fund (SWF) to manage oil earnings just as it recommended that spending from the SWF’s infrastructure fund be integrated into the budget and medium-term expenditure plans.

The IMF said the medium term growth outlook of Nigeria “remains favourable, although subject to external downside risks” while emphasizing the ‘continued need for policies to safeguard stability, diversify the economy and make growth more inclusive.”

The fund said it “welcomed the (Nigerian) authorities’ initiatives to improve the business climate and reform sectors with high employment potential, particularly agriculture” and “encouraged the authorities to persevere with planned reforms in the energy sector under appropriate social safeguards.”

Daily Trust

  1. Tran Reply

    Powerful post as usual, Solomonsydelle. In fact, now you are beginning to sound like a Naija picltoiian. I hope its a sign of things to come.Personally, I have a problem with writers describing Nigeria as a ‘young (nascent) democracy’. It is wrong. There has been some form of guided democracy in Nigeria since way back in the 1940s under Gov Macpherson or someone else. Can’t remember who now.As at October 1, 1960, Nigeria became an independent democracy. It is true that we have had some unfortunate hiatuses (hiati?) in the form of military coups and all that, but those unfortunate incidents should not define us.Nigeria IS a democracy that has had too many military interventions in its history. For 28 out of 48 years, one may say it has been too military but remember we always had a Constitution that was not abrogated – but just suspended while the military ruled and looted. It’s like armed robbers entering a home and holding a family hostage at gun point for hours or even days. I don’t think the press or anybody will refer to the house as becoming that of the armed robbers at any point during the siege. Eventually, they will leave and the house still belongs to the owners. Such is it with Nigeria. It is when picltoiians try to rewrite history that they make statements with words like ‘nascent democracy’ therein as if they are the first to practice democracy in Nigeria. Some may even declare their girlfriends’ birthdays as ‘Democracy Day’. I cannot say more than that. LOL!.South Africa had an oppressive apartheid regime for over 60 years but South Africans today do not refer to that unfortunate period of their history as defining their national character. Rather they celebrate their ability to overcome the evil of apartheid together and move forward therefrom. Remember too that even all through that dark period, South Africa was referred to as a ‘democracy’.Nobody can move forward if he continues to look backwards. He will fall yakata. We must learn to define ourselves by our hopes of the future and not by our failings of the past.20-20/20 is still some ways away. We will make it.Believe.

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