Agora Policy, an Abuja-based think tank set up to find practical solutions to urgent national challenges, has suggested that Nigeria must undertake petroleum sector reforms to end petrol subsidy and check oil theft.
The think thank organisation also enjoined the Nigerian government to ensure greater compliance in remittances by revenue-generation agencies; further diversifying revenue sources for the government; increasing the tax base and improving the efficiency of tax collection; raising tax rates on luxury/’sin’ items and VAT and selling and concessions some government assets.
In tackling the negative impact on Nigeria’s productivity, investment, and human welfare, Agora Policy in its report, recommends prioritising and finetuning job creation strategies, with a special focus on the SMEs; Scaling up investment in education, especially technical and vocational skills training and expanding investment in critical infrastructure, including through public-private partnerships.
Others are increasing coordination across tiers of government on poverty alleviation programmes; diversifying the export base, especially agro-processing and light manufacturing; conducting a comprehensive review of Nigeria’s trade policy framework and replacing distortionary and inefficient non-tariff measures with import duties.
Also recommended are phasing out restrictive trade practices like border closure and import bans; addressing cumbersome customs processes and tackling corruption and leakages at the ports; redefining exchange rate policy towards making Nigeria a more competitive economy with regard to present and potential non-oil exports. It is also recommended that the CBN should prioritise inflation management and work with the FG to end Ways and Means.
The aforementioned solutions, according to Agora Policy, will address Nigeria’s dwindling revenue challenge.
In the report titled, ‘Options for Revamping Nigeria’s Economy,’ the policy think tank group revealed that the Federal Government (FG’s) tax revenue-to-GDP shrank from 8.2% in 2011 to 4.4% in 2019.
The tax figure was understood to be the lowest for central governments in Africa and among Nigeria’s peers.
