The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee (PFPTRC), Taiwo Oyedele, lamented the general laxity towards the Federal Government’s assets across the country, estimated at N100 trillion. He hinted that with proper management, the Federal Government could earn N10 trillion yearly from these Assets to fund developmental programmes.
Oyedele stated this at an end-of-year cocktail party held in his honour by the Harvard Business School Association of Nigeria (HBSAN). He says, “Government has not shown care about those assets such that they are being mismanaged. Imagine that you become more efficient with a hundred trillion assets alone. Even if you get a return of 10 per cent per annum, that is N10-trillion revenue,” he noted.
The tax expert said if the assets could not be managed properly, they should be sold off. He said some of it would give FX liquidity to make the private sector more productive, adding that not only would that stimulate economic activities but would bring returns in the form of taxes.
In his words, while nothing has been done to the Ministry of Finance Incorporated (MOFI) Act, the law of 1959 would be rewritten to clarify that those assets, including the Government’s interest in enterprises, should be managed by MOFI. Oyedele noted that the top pillar of the 75-member presidential committee was economic growth facilitation, adding that the only sustainable way to generate revenue is to grow the economy.
He said the country needed to look at impediments that make it difficult for the economy to be competitive and grow, particularly for small businesses. Oyedele said the committee has presented its reports to the President with key recommendations to address critical economic issues ranging from exchange rate management, the impact of fuel subsidy removal, and moderation of inflation to facilitating economic growth.
He noted that Nigeria’s inflation rate is about four times the global average. At the same time, the gross domestic product (GDP) size is not big enough and is falling in dollar terms because of naira depreciation. He said the country’s capital income has also fallen over the past ten years and has been negative, noting that there are more poor today than the country was yesterday due to unemployment.
Oyedele noted that the rising public debt is even more problematic, with a huge gap in the borrowed amount versus capital spending. This needs explanation, especially as the country was borrowing to fund recurrent expenditure and debt service.
He said the committee had suggested measures to the Federal Government to address the duplication of functions in public service, ensure prudent public financial management, and optimize value from government assets and natural resources. Oyedele noted that the committee has also recommended policy signalling and collaboration by ministries, departments and agencies (MDAs).
He said the committee has also introduced a spending framework to enhance the priority and quality of spending and fiscal measures to complement foreign exchange management for convergence and stability.
Lending more credence to the observation, the HBSAN President, Collins Onuegbu, said stakeholder engagement and public consultation were apt, especially as it was a difficult time for the economy. He said members of the association who own businesses are worried about the impacts of the new tax regime on businesses.
