Our Finance Minister, Mr. Wale Edun, who is responsible for fiscal policy, appeared on ChannelsTV to share his plans to improve the Nigerian economy:
1) Giveaways. He spent half of his time talking about giveaways. He feels most of the excess naira in circulation has gone to the rich, so he wants to share more excess naira with the poor as well.
2) To plug revenue leakages by channelling all revenue directly to the FG and disbursing expenditures directly to intended recipients without intermediaries who might embezzle the money.
3) To increase tax collection by 70% this year without increasing tax rates and eliminating some types of tax that are unnecessary.
4) He want to pay back Ways & Means by looking for new sources of revenue. I felt that his explanation of how that would be achieved was vague. It’s unlikely to happen after CBN’s data showed an increase in W&M.
5) Collaborating with CBN by increasing interest rates to attract FPI. I find this to be short-sighted if attracting hot money is the perceived benefit of raising interest rates and not the reduction of inflation, & FDI. Also, our real interest rates are still negative, so how will this work?
Overall, Mr Edun has some decent ideas but his overall plan is inadequate to solve our problems.
I recommend inviting the economists who spoke at Proshare’s Economist Conference to Abuja for a retreat where they can help him to develop a comprehensive plan that might actually work.
