By Ossom Raphael
Abuja – In an effort to increase its tax efficiency, the Federal Government, Tuesday, said its working to bring the informal sector into the tax net.
The Finance Minister, Kemi Adeosun, who said this at the launch of the Regional Economic Outlook on Sub Saharan Africa by the International Monetary Fund, IMF, in Abuja, explained that the move is part of government’s effort to mitigate pressures on its resources which has under been considerable pressure with the fall in crude oil price from a high of $114 per barrel in mid-2014 to about $50 per barrel.
The Minister said with only 500,000 people paying tax out of its huge informal sector, it was time the country began to mobilise the revenue base of the sector.
“Given the size of the informal sectors in our countries and its contribution to employment and household income we need to improve our policies on vital sector with a view to realising the full potential of the sector.
“We have tried to mitigate these pressures through a series of interventions , such as growing of the non-oil sector base through increased efficiency of tax and customs collections,” Adeosun said.
Mrs. Adeosun insisted that the era of extraction and exportation of raw commodities with little or no value -add was over. According to her, the old approach must give way to a broad-based growth model that is driven by “import substitution strategies that will localise production, help create jobs and achieve sustainable growth.”
The Minister, while explaining that 2016 was particularly difficult for many African countries including Nigeria, stated that bold and necessary reforms were needed to overcome the slowdown which analysts described as the weakest growth experienced in two decades. This is even as she said that the Economic Recovery and Growth Plan (ERGP), was one of the several efforts towards achieving these reforms.
According to the Minister such reforms include; economic diversification, structural transformation, fiscal consolidation, public finance management and macroeconomic stability. Others are the financial sector development, sustained fight against corruption, good governance and building institutions.
Fielding questions from journalists at the press briefing immediately after the launch of the report, the Central Bank Governor, Godwin Emefiele, said the ERGP, is a bold plan by the government to get the economy on the part of recovery and growth.
According to the Apex Bank Governor, “Economic Recovery and Growth Plan (ERGP) is a document that has very bold policies enshrined in it. We are very committed to it, both the fiscal and monetary authorities have been very clear. We will work very hard to ensure that the content of those documents are implemented as fast as possible so that we can begin to see our way to recovery and out of the current crisis.”
The Director, Monetary Policy Department, of the CBN, Dr. Moses Tule, asserted that policy prescription remains very loose and it poses the danger of slowing the country’s economic recovery effort.
While explaining that Nigeria’s growth pattern may not follow the report, Dr. Tule noted that delayed policy response and uncoordinated policy implementation is critical to country’s recovery and called for full implementation of the Plan.
The IMF in its Regional Economic Outlook on Sub Saharan Africa launched in Abuja on Tuesday, the growth momentum for the region remained fragile.
In the the report, growth slowed in about two-third of the countries in the region accounting for 83 per cent of regional GDP and it is estimated to reached 1.5 per cent
The report further noted that modest rebound to 2.5 per cent expected in 2017 will be to a large extent driven by one-off factors in the three countries-Angola, Nigeria and South Africa. On the other hand, western and eastern African countries are still expected to grow at 5 per cent to 7.5 per cent. Nonetheless, the underlying regional momentum remains weak, and, at this rate, sub-Saharan African growth will continue to fall well short of past trends and barely exceeds population growth, the report said.