Moghalu To FG : Halt Foreign Borrowing, Improve Tax Revenue
The Founder/President, Institute for Governance and Economic Transformation, Prof. Kingsley Moghalu, has advised the federal government to establish a moratorium on foreign borrowing and develop measures to improve tax revenue.
Moghalu, who was the Presidential Candidate in the Young Progressive Party in the 2019 election, made the recommendation in a statement titled: “Beyond Minimum Wage: The Limits of Populism and the Need for Fundamental Economic Reforms,” to mark the recently celebrated 2019 Workers’ Day.
In addition, Moghalu who called for the removal of fuel subsidy in the country, advised the federal government to develop and establish, in consultation with labour unions, a set of policies to mitigate the likely short-term inflationary impact and to permanently end such subsides as from the budget for 2020.
Also, he recommended the deregulation of the importation and sale of petrol in order to produce a market-determined price of petrol and mitigate adverse inflationary effects in the medium term.
“The federal government should establish a moratorium on foreign borrowing alongside measures to improve taxation revenue.
“FGN should commence a progressive reduction of recurrent expenditure by 10 per cent every budget year from 2020.
“The Central Bank of Nigeria (CBN) should abolish differential exchange rates and establish a uniform exchange rate for all transactions.
“The CBN should abolish the ban on provision of foreign exchange for the importation of most or all of the 40 items denied forex; prior to this action the Federal Ministries of Finance and Industries, Trade and Investment should establish appropriate tariffs for the imports of luxury and non-essential items while creating policy to give reasonable advantages for locally manufactured goods, including enhanced export incentives, in order to realign the Nigerian economy towards competitive manufacturing for domestic and export markets,” the former CBN Deputy Governor said.
Furthermore, he urged the federal government to submit an Executive Bill for the abolition of the Land Use Act; stating that according to a study by PwC, this legislation and policy action would liberate hundreds of billions of dollars of “dead” capital (potential but suppressed financial values in land and property-related transactions) that could lift off the Nigerian economy.
He also called for the strengthening of the policy environment to encourage mass production of innovation and a pipeline of products of innovation into commercial markets.
“As from 2020 turn the N500 billion budget for the Social Investment Programs into a one-time equity contribution to a public-private venture capital fund of N1 trillion for innovation and small scale entrepreneurship aimed at helping the poor and unemployed escape poverty by creating wealth and inclusive economic growth.
“The venture capital fund should be managed by the private sector, which will bring in the other N500 billion in capital. “This reform will bring in equity capital into the lower strata of the Nigerian economy, complementing efforts by the CBN, such as the establishment of National Microfinance Bank that will lend at single-digit rates, to improve affordable access to credit.
“It will also contribute to bringing in the informal sector, which contributes about 65 per cent of Nigeria’s GDP, into the formal economy and thus expand the tax net. It will also create millions of new jobs for unemployed or under-employed youth,” he added.