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Tag: International Monetary Fund (IMF)

  • Adeosun, G24 discuss tax revenue, compliance

    Adeosun, G24 discuss tax revenue, compliance

    Finance Minister, Kemi Adeosun has discussed with fellow finance ministers in the G24 Group on ways to boost tax revenues and compliance to drive sustainable economic development.

    Speaking at the ongoing International Monetary Fund (IMF)/ World Bank Spring Meetings in Washington, she said revenue mobilisation is critical to the success of Nigeria’s economic reform agenda.

    “We have an unacceptably low level of non-oil revenue, and much of that is driven by a failure to collect tax revenues. With a tax to Gross Domestic Product ratio of only six per cent, one of the lowest levels in the world, we have a lot of work to do if we are going to build a sustainable revenue base that will deliver inclusive growth. Our data gathering programme over the last year has now given us the tools we need to be more aggressive at pursuing tax avoiders, both domestically and abroad,” she said.

    Speaking further, she explained that as some of her contemporaries in the G24 have done successfully, Nigeria is going to focus on tax in 2017 through an asset and income declaration scheme to address her low tax revenue collection and ensure improved compliance, a broader tax base and more sustainable revenue.

    The minister also highlighted the need for strong budget implementation and transparency to create trust and accountability in government: “While we focus on raising revenue’s and bringing people into the tax system, we must be equally aggressive in our approach to budget implementation and transparency. Our people must know where their hard earned tax contributions are being spent and the impact that they are having on national development, and the daily lives of citizens. This will be a core focus for us.”

    The Minister also met with the ratings agencies Moody’s and Fitch to update them on progress towards economic reform objectives, and met with the World Bank Country team to discuss the status of on-going projects in Nigeria, and the pipeline of projects for 2018.

    The Minister will be attending meetings on Closing the financing gap for water, affordable housing finance food security and nutrition over the coming days as part of the government’s focus on sustainable solutions to some of Nigeria’s most pressing social challenges.

    “While the infrastructure that we build to facilitate power and transportation is vital to our economic growth, we are equally focused on addressing the challenges we face to deliver services to our people. Water quality and nutrition are fundamental to quality of life, but also deliver economic benefits. We must do more to improve living standards for our people and so addressing food security, water and nutrition are central to our reform agenda. This isn’t just about economics, these are the basic responsibilities of government, we need to redouble our efforts and show people that their tax revenue can deliver real change in their daily lives.”

     

  • Nigeria’s economy will grow in 2017 – Expert

    Prof Uche Uwaleke, an economic expert says he is optimistic that Nigeria’s economy will be ‘out of the woods’ this year.

    Uwaleke, the Head of Banking and Finance, Nasarawa State University, said this in an interview with the News Agency of Nigeria (NAN) in Abuja on Tuesday.

    He stated that the growth would be possible, especially if the 2017 expansionary budget was approved in due time and implemented accordingly.

    Uwaleke shares the same optimism with the International Monetary Fund (IMF) regarding a possible growth by 0.8% in the country’s Gross Domestic Product (GDP) this year.

    According to him, the growth will be largely powered by the crude oil price, which is recovering and trading currently in excess of 50 dollars per barrel well above the 2017 budget reference price.

    “I have confidence in the ability of OPEC member countries to sustain this tempo by keeping to the agreed production cut.

    “The attendant improvement in oil revenue will translate to more funds for state governments to pay workers’ salaries and boost aggregate demand.

    “An increase in oil export proceeds will equally impact positively on exchange rate and buoy activities in the real sectors of the economy, especially agriculture and manufacturing.

    “Already, the Purchasing Managers Index, an indicator of manufacturing activity, is reported to cross 50 points threshold in December 2016, after witnessing a decline in the previous eleven months.’’

    Uwaleke said that the favourable agric policies of the government including CBN’s intervention, especially in Rice production through its Borrower Anchor programme, were already impacting positively on the sector.

    He said the contribution of banks to GDP would increase on the back of rising oil price, particularly for many of them with significant exposure to the oil industry.

    The university don said that the capital market was also expected to contribute more to national output in 2017.

    This, he noted was due to the fact that some companies such as MTN, Medview Airline and Jaiz Bank had already announced their intention to list on the Nigerian Stock Exchange this year.

    “Overall, there is a strong possibility that the economy will be out of the woods this year, especially if the 2017 expansionary budget is approved on time and well implemented.’’

  • Coal for electricity: Adeosun blasts World Bank, IMF

    Coal for electricity: Adeosun blasts World Bank, IMF

    The federal government on Wednesday lashed out at Western countries and multilateral development institutions for hampering her efforts to provide stable electricity supply to Nigerians.
    Speaking at a panel discussion at the on-going International Monetary Fund (IMF)/ World Bank meeting in Washington DC finance minister Mrs. Kemi Adeosun called the multilateral institutions and their western backers hypocrites for denying Nigeria and other African countries to use coal to generate electricity.
    According to Adeosun “am going to point fingers at multilateral institutions and the west, a good example is the coal-fired power plant, we in Nigeria have coal but we have power problem, yet we’ve been blocked because it is not green, there is some hypocrisy because we have the entire western industrialization built on coal energy, that is the competitive advantage that they have been using, now Africa wants to use coal and suddenly they are saying oh! You have to use solar and the wind (renewable energy) which are the most expensive, after polluting the environment for hundreds of years and now that Africa wants to use coal they deny us.”
    She agreed that Africa needs to make investment in infrastructure but the playing field must be leveled “we need policy consistency to attract bankable projects, we also need macroeconomic stability, but if you want to phase out coal,  no problem but those who started it should lead, those who want us to stop using dirty fuel should stop it first before telling us not to use it. By telling us not to use coal they are pushing us into the destructive cycle of underdevelopment, while you have the competitive advantages, you tie our hands behind us” she said.
    Adeosun went ahead to state categorically that she “would sign up to a global proposal that is fair, with a morally viable sequence that demands that the rich countries have to close their coal fields first before other countries have to do anything.”
    Professor Paul Collier of the University of Oxford who agreed with the finance minister called that “an ethical commitment from an African minister.”
    Nigeria’s finance minister lamented that huge infrastructure gap all over the world and stated that even if the federal government spends all its annual budget for five years on infrastructure, it cannot close Nigeria’s infrastructure gap. The global infrastructure deficit stands at $1.5 trillion.
    At the end of the panel discussion, Adeosun disclosed to Nigerian journalists that efforts of the federal government to repatriate stolen monies from foreign countries was yielding positive results with the US and Switzerland offering to return stolen loots.
    However, to ensure that the repatriated loots are put to good use, the government’s of the countries with these stolen monies she said are demanding that the federal government identify what specific projects specific amounts of money would be devoted to before they release the monies.
    Similarly, a report on fiscal monitoring disclosed that two-thirds of the global debt of the nonfinancial sector—comprising the general government, households, and nonfinancial firms—is currently at an all-time high amounting to about $100 trillion.
    This the report said “consists of liabilities of the private sector which, as documented in an extensive literature, can carry great risks when they reach excessive levels. However, there is considerable heterogeneity, as not all countries are in the same phase of the debt cycle, nor do they face the same risks.”
    However, the report warned that “there are concerns that the sheer size of debt could set the stage for an unprecedented private deleveraging process that could thwart the fragile economic recovery and resolved that “this private debt overhang problem is, however, not easy in the current global environment of low nominal output growth.”
    At another forum, the International Finance Corporation (IFC) of the World Bank Group, has launched a new program that aims to raise $5 billion from global institutional investors to modernize infrastructure in emerging markets over the next five years.
    This fund will open up a new stream of capital flows to improve power, water, transportation, and telecommunications systems in developing countries.
    The initiative called MCPP Infrastructure, builds on the success of IFC’s Managed Co-Lending Portfolio Program, a loan-syndications initiative that enables third-party investors to participate passively in IFC’s senior loan portfolio. In its first phase, the program allocated $3 billion from the People’s Bank of China across 70 deals in less than two years. It demonstrated how large investors can benefit from delegating the processes of deal origination and approvals to IFC.
    The first partnership under the program was signed with the global insurance company Allianz. Under the agreement, Allianz intends to invest $500 million, which will be channeled into IFC debt financing for infrastructure projects in emerging markets. IFC is also in advanced discussions with Eastspring Investments, the Asian asset management business of Prudential, for a commitment of $500 million. Similar discussions are being conducted with AXA, also for a commitment of $500 million.
    MCPP Infrastructure is designed for institutional investors seeking to increase their exposure to emerging markets infrastructure. IFC will originate, approve, and manage the portfolio of loans that will mirror IFC’s own portfolio in infrastructure. It will do so in a manner agreed upfront with its partner investors, always subject to the overall governance of the platform.
  • Full text of Saraki’s speech during IMF Chief’s visit

    Full text of Saraki’s speech during IMF Chief’s visit

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    ADDRESS BY THE PRESIDENT OF THE SENATE AND CHAIRMAN OF THE NATIONAL ASSEMBLY, HIS EXCELLENCY, SENATOR (DR.) ABUBAKAR BUKOLA SARAKI TO THE MEETING WITH THE PRINCIPAL OFFICERS OF THE NATIONAL ASSEMBLY ON THE VISIT OF MADAME CHRISTINE LAGARDE, MANAGING DIRECTOR, INTERNATIONAL MONETARY FUND, (IMF) ON 06 JANUARY, 2016.

    Protocol:

    Your Excellency, on behalf of my Distinguished and Honourable colleagues, I warmly welcome you and your entourage to the National Assembly. Your historic visit today, is a testament of the importance you attach to the role of the legislature in the attainment of economic development policies.

    Your Excellency, your visit in this New Year is very auspicious as we begin to deliberate on the 2016 Appropriation Bill as the world economy rebalances in response to falling commodity prices, in particular oil.

    Your Excellency, this National Assembly congratulates you and appreciates the new IMF recognition of the pivotal role parliamentarians could play in forging sustainable development policies for the attainment of the IMF mandate. To me this is critical to minimizing the erroneous perception on IMF policy prescriptions and conditionalities that have been entrenched over the years especially in Africa.

    This, I believe, is vital to the success of the Fund’s policies and programmes not only now but also in the future. As legislators, we play an important role in making our people understand IMF advice, policy trade-offs, consultations and other engagements, so that ownership, transparency and accountability are brought to bear in economic policy choices.

    Since the year 2000 when the IMF/World Bank Group founded the Parliamentary Network which is an independent, non-governmental organisation, participation in the programmes has been on the rise by legislators from all over the World. We commend the initiative. This outreach to legislators is a win-win situation since one of the objectives is to familiarize the legislators with the rationale behind the IMF advisory.

    We recommend that IMF should further strengthen this network as a veritable tool towards greater convergence of understanding and engagement.

    Here at home, the effect of the low oil prices on government revenue is challenging us to think out of the box in funding the repair of infrastructure, boosting employment, and securing our borders and people. These are no mean tasks and we welcome the support of our friends in this trying period.

    Our economic fundamentals remain robust and the economy is resilient to absorb the current oil price shock. The situation is bringing out the entrepreneurship in us. Our private sector is also rising to the challenge. We assure you we will use this occasion to build a new economy diversified away from the perennial effects of oil price shocks.

    The 8th National Assembly will provide the legislative leadership in ensuring a conducive environment for business to thrive.

    The Nigerian legislature strongly believes that having a collaborative working relationship with the Executive Branch of government brings development closer to the people. Since the advent of the new administration, we have worked closely to stabilize the economy and steady the fiscal environment. This, we have indeed demonstrated by the speedy passage of the Medium Term Expenditure Frame Work (MTEF) and recently in the postponement of our recess in order to receive President Muhammadu Buhari to present the 2016 Appropriation Bill. We have also set in motion activities towards reforming our oil and gas industry through legislative initiatives in order to meet international best practices.

    Engaging with our people the issues we strongly made here of FOREX – to do business.
    This is expected – what IMF can do to bridge the gap.
    CBN to advise open – allow Forex
    (ii) No devaluation.
    (iii) Loans to SMEs – bring interest to CBN
    (iv) Technical assistance
    (v) Support policies.

    The 8th Senate Legislative Agenda is of particular interest in Parliamentary Network initiative which brings together parliamentarians and representatives of private sector as well as civil society organisations to discuss how to improve the environment for doing business in the developing world and how countries can increase their ranking in publications such as “Doing Business Report”.

    The purpose of our Legislative Agenda is to enable us focus our lawmaking in areas that will help create jobs, expand our infrastructure base and make our economy work for the benefit and happiness of the majority of our people. Pivotal to the attainment of this overarching objective is the state of the Nigerian business environment. In collaboration with major stakeholders, the 8th Senate is presently signing a memorandum of understanding on “The Enhancing Nigerian Advocacy for Better Business Environment Project,” a National Assembly business and investment round-table initiative, with developmental organizations.

    These roundtables will provide opportunity to the private sector to work closely with the legislature in developing friendly-business environment.

    The initiative will commence with a review of institutional, regulatory and legal instruments currently becoming impediments and bottlenecks to doing business in Nigeria.

    Your Excellency, Distinguished and Honourable colleagues, in closing, I want you to take away these messages:

    Legislature/Executive Collaboration on the Economy:

    The National Assembly is committed to working closely with the Executive arm in addressing the challenges facing the Nigerian economy. This is the position on both sides of the aisle;

    Diversifying and Modernizing Our Economy:
    We will support the Executive with legislation where necessary to give confidence to investors.

    Blocking Revenue Leakages:
    We are assiduously working towards blocking identified legal loopholes on revenue leakages and expanding our tax base;

    Conducive Business Environment:
    We are giving priority to legislation aimed at providing a more conducive business environment in general and reducing the cost of doing business in Nigeria; and

    Ending Impunity and Reducing Corruption: The National Assembly more than ever before, is working at improving its oversight systems to expose corruption wherever it may be, and providing better legal frameworks to entrench the rule of law and end impunity.

    The global economy is currently well interconnected. With our economic weight in our sub-region, a well functioning Nigerian economy provides a strong pillar to its growth. We therefore, implore the international community and financial institutions to partner with us in supporting our economic development aspirations.

    On this note, Your Excellency, we welcome you once again to our beautiful city and wish you the Season’s Greetings.

    Bienvenue!

    PRESIDENT OF THE SENATE

  • We’ll look inward to tackle economic challenges – Buhari

    We’ll look inward to tackle economic challenges – Buhari

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    President Muhammadu Buhari on Tuesday said his administration will look inwards, enforce regulations to stop financial leakages and adopt global best practices in generating more revenue to mitigate the effect of dwindling oil prices on the Nigerian economy.

    He made the remark while receiving the Managing Director of the International Monetary Fund (IMF), Ms Christine Lagarde, at the Presidential Villa, Abuja.

    Buhari, in a statement issued by his Special Adviser on Media and Publicity, Femi Adesina, said his administration will also enforce greater discipline, probity and accountability in all revenue generating agencies of the Federal Government.

    He said: “We have just come out of budget discussions after many weeks of taking into consideration the many needs of the country, and the down turn of the economy with falling oil prices and the negative economic forecasts.

    “We are working very hard and with the budget as our way forward, we will do our best to ensure that our country survives the current economic downturn.

    “We have also told all heads of Ministries, Departments and Agencies of government that on our watch, they will fully account for all funds that get into their coffers.”

    The President said the Federal Government was reviewing its operational costs and had directed all the Ministries, Departments and Agencies to cut down on their overhead costs.

    He said the Federal Government will welcome the technical support and expertise of the IMF for its plans to diversify the Nigerian economy and further unleash its growth potentials.

    In her remarks, Ms Lagarde said the IMF will be willing to assist the federal government in plugging revenue leakages, tracing stolen funds and restructuring its tax system.

  • Nigerian tax to GDP ratio of 7% not acceptable, says Okonjo-Iweala

    Nigerian tax to GDP ratio of 7% not acceptable, says Okonjo-Iweala

    The Coordinating Minister for Nigeria’s Economy, Dr Ngozi okonjo-Iweala says the nation’s tax to Gross Domestic Product (GDP) ratio of 7 per cent of GDP Is not sufficient to build a strong economy.

    Okonjo-Iweala disclosed this during a presentation at the Spring meeting of the World Bank Group and the International Monetary Fund (IMF) in Washington DC.

    The Minister spoke on the topic “Fiscal Policy, Equity and Long-Term Growth in Developing Countries”.at a forum of  the World Bank.

    “In my own country, Nigeria, tax to GDP ratio is an unacceptable 7 per cent of GDP as we depend mostly on government’s direct share of oil revenue.

    “This has to change,’’ she said.

    According to her, the fundamental observation is that for low-income countries, more resources need to be mobilised from domestic sources given the anticipated decline in Official Development Assistance (ODA).

    She noted that the IMF estimates that many low-income countries still have tax revenues which fall below the generally accepted threshold of 15 per cent of GDP.

    “For example, low-income countries in Africa are below the 15 per cent of GDP.

    “Overall, we know that a further increase in tax revenues of about 2-4 per cent of GDP is attainable in many low-income countries.

    “Interestingly, investing ODA in building strong tax systems in developing countries can yield excellent returns.

    “Some research by the OECD indicates that one dollar of ODA spent on building tax administration capacity results in another 350 dollars in increased tax revenues,’’ she added

    Okonjo-Iweala said that in developing countries, policy-makers must first take responsibility for reviewing how resource mobilisation in their economies would be improved.

    She said that a complete diagnostic had been carried out, with the help of McKinsey consult, to see how to improve compliance in the tax system.

    She noted that about 75 per cent of registered firms were not in the tax system.

    “When we looked more closely at our tax payers’ database, we discovered that about 65 per cent of registered tax payers had not filed their tax returns in the past two years.

    “The main culprits tend to be this intermediate group of medium-sized professional service providers, contractors, and landlords.

    “This non-compliant group fall in the grey area between the informal sector and large companies and I think, from an enforcement viewpoint, we can get a good `bang for the buck’ by focusing on this sector,’’ she said.

    Okonjo-Iweala said that the estimated tax leakages due to unpaid real estate rentals in Nigeria amounted to about 250 million dollars per annum. (NAN)

  • IMF to Nigeria: keep inflation, credit growth rates moderate

    IMF to Nigeria: keep inflation, credit growth rates moderate

    • Cuts global growth forecasts

    The International Monetary Fund (IMF) has advised Nigeria, other developing economies and emerging markets to retain their ability to respond flexibly to shocks by maintaining sound fiscal position, by keeping inflation and credit growth at moderate rates.

    The agency disclosed this in its October 2012 World Economic Outlook (WEO), released yesterday.

    The nation’s inflation rate for August was 11.7 per cent. Historically, from 2006, the inflation rate averaged 10.6 per cent, reaching an all time high of 15.6 per cent in February of 2010 and a record low of 3.0 per cent in July of 2006. Inflation rate refers to a general rise in prices measured against a standard level of purchasing power.

    Following the adoption of a tight monetary policy by the Central Bank of Nigeria (CBN), credit extended to the private sector only increased 4.7 per cent between December 2011 and July 2012, despite year-on-year growth rates of 40 per cent-plus, which was partly attributed to the Assets Management Company of Nigeria’s (AMCON) bonds.

    Analysts expect a pick-up in credit growth from the first quarter of 2013, which will accelerate once rates begin to ease. But the Federal Government has not really succeeded on the fiscal front.

    The agency also noted that in emerging markets and developing economies, activity has been slowed by monetary policy tightening in response to capacity constraints, weaker demand from advanced economies, and country-specific factors.

    “Policy improvements have raised their resilience to shocks. Since the crisis erupted in 2008, expansionary policies have buffered the negative impact of the weakness in advanced economy markets: fiscal deficits have typically been above pre-crisis levels, whereas real interest rates have been lower.”

    It said domestic credit has grown rapidly. “Over the medium term, policymakers will need to ensure that they retain the ability to respond flexibly to shocks by maintaining a sound fiscal position and also by keeping inflation and credit growth at moderate rates,” the IMF stated.

    In this respect, the Fund said policy tightening during 2011 was appropriate, stressing that given the growing downside risks to external demand, central banks have appropriately paused or reversed some of the monetary policy tightening measures.

    The IMF also lowered its global growth forecasts to 3.3 per cent and 3.6 per cent for the year 2012 and 2013, respectively.

    This is slightly lesser than the July 2012 WEO update that projected a global growth of 3.5 per cent in 2012 and 3.9 percent in 2013, respectively.

    “The recovery has suffered new setbacks, and uncertainty weighs heavily on the outlook. A key reason is that policies in the major advanced economies have not rebuilt confidence in medium-term prospects. Tail risks, such as those relating to the viability of the euro area, or major U.S. fiscal policy mistakes, continue to preoccupy investors,” the report said.

    The Fund however forecast a relatively solid output in many emerging markets and developing economies, but noted that output remains sluggish in advanced economies.

    “Unemployment is likely to stay elevated in many parts of the world. And financial conditions will remain fragile,” it added.