During a panel session at the Lagos Chamber of Commerce and Industry 2024 Economic Outlook and Budget Analysis, the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, revealed that the Federal Government is expected to save N8 trillion annually through the implementation of fuel subsidy removal and exchange rate unification policies.
Oyedele emphasized the significance of utilizing the funds saved to alleviate the challenges faced by the average Nigerian. He urged the government to be intentional in spending the N8 trillion to positively impact the citizens, particularly those experiencing multidimensional poverty.
The committee recommended the suspension of what Oyedele referred to as “nuisance taxes,” which hinder economic activities without substantial benefit to the government treasury. He stressed the need to create digital opportunities for the youthful population, asserting that Nigeria has the capacity to generate $20 billion annually from the technology sector.
In a bid to address fiscal challenges, the committee urged the promotion of exports, including services and intellectual property. Oyedele suggested that before exporting goods, there is an opportunity to export services and intangibles.
Additionally, he highlighted loopholes in diaspora remittances, stating that over 90% of the $20 billion recorded in 2023 did not arrive in foreign currencies due to existing loopholes that allow middlemen to divert funds and pay recipients in naira.
The Director General of the Budget Office, Ben Akabueze, expressed concerns over the country’s persistent deficit budgets for the past three decades, leading to a growing debt profile. Akabueze emphasized the need to focus on raising public revenues to meet the increasing demand for public goods and services. He acknowledged that the deficit for the 2024 budget is about 3.8% of the GDP.
Responding to criticisms regarding government expenditure, Akabueze clarified that Nigeria is not spending enough, and the focus should be on spending efficiently rather than reducing expenditure.
Financial Derivatives CEO, Bismarck Rewane, highlighted key economic challenges, including sub-optimal growth, income inequality, high poverty and unemployment rates, inflation, fiscal imbalances, and currency pressures. He attributed the forex crisis to factors such as lack of transparency, unclear policy direction, capital controls, and high speculation/arbitrage activities.
