Judul : Reforms painful, but Nigeria no longer where we used to be — Oyedele
link : Reforms painful, but Nigeria no longer where we used to be — Oyedele
Reforms painful, but Nigeria no longer where we used to be — Oyedele
The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee (FPTRC), Taiwo Oyedele, has said Nigeria is beginning to see the positive impact of the Federal Government’s economic reforms, stressing that despite the hardship, the country has made significant progress compared to previous years.
Speaking at the Executive Summit on Nigeria’s Tax Reforms organised by PwC, Oyedele acknowledged that the reform journey has not been easy but insisted it is necessary to stabilise the economy.
“The reforms have been painful, but they’re beginning to yield positive macro results,” he stated. “We’re no longer where we used to be.”
Addressing concerns about the immediate effects of the reforms, he noted that public discourse often focuses on personal hardship rather than structural progress.
“Many times when you hear analysts speak, including economists, accountants, politicians, everybody all over the place, what you hear is ‘is your life better now than it was before?’
“That’s the wrong question to ask. I’m not here to convince or confuse anyone whether the government is doing well or not, no. That would be condescending for this elite audience. You can make your own judgments. I’m here to only share the facts with you so you can make your own decisions.”
Oyedele highlighted various indicators showing improvement in the macroeconomic landscape since the start of the reforms.
“Today, being factual, from negative trade balance and balance of payment, it is now positive. Not just positive, the numbers are significant.
“Official exchange rate is unified, and the margin between the official and parallel rates has been collapsed. We’ve cleared foreign exchange forward of more than $7 billion, and we’ve moved from under $4 billion on a net external reserve to over $20 billion today,” he stated.
He added that Nigeria’s budget deficit is shrinking, infrastructure spending has increased, and the tax-to-GDP ratio has risen from below 10% to 13.5% within two years.
“Instead of 97% to service debt, it’s now under 50% in two years,” he said. “We no longer print money to spend; rather, we’ve paid down part of the ways and means that the previous administration printed.
“We have market-friendly policies overall than we used to have two, three years ago.”
While noting that challenges still exist, he said the economy is being repositioned for long-term recovery and stability.
“I’m not saying that all the problems have been solved. No. I’ll be deceiving myself and, therefore, deceiving everybody else. But we’re seeing the macros moving in the right direction. And you need the macros to accomplish the micros. It’s like planting a tree for which you expect fruits. The roots have to go down so that the fruits can come up.”
He stressed that the reforms, if not implemented, would have led to even worse economic conditions for Nigerians.
“If we didn’t do these reforms, it could have been worse,” he said. “Nigeria today without the reforms would have bigger deficits, and more money printed. We will have easily over $10 billion unmet forwards. Tax to GDP ratio will be less than 10%. We’ll be spending over 100% of our revenue to service debts. You hold money; you will not find Premium Motor Spirit, PMS, to buy. There will be more poverty, and we’ll have more ways and means.”
However, Oyedele admitted that high interest rates, lack of decent jobs, and poor communication between agencies remain areas that must be addressed.
“Like, interest rate is still high. The interest rate environment is not very conducive for legitimate businesses. Every time I see that, I wonder, what legitimate business can anybody do borrowing at 35% and break even? There are not many of those.
“We don’t have decent jobs yet. Governments can be more coordinated and communicate better.”
He also clarified that the new tax reform exempts most Nigerians from capital gains tax, explaining: “This reform has exempted individuals from all manners of capital gains. You have to sell more than 150 million shares in the capital market to even think about paying capital gains tax. If you have people that will sell more than 150 million here, majority of Nigerians, they haven’t seen those kind of numbers before.”
According to him, the new tax regime is expected to take effect in January 2025 following the harmonisation of the Tax Act with the National Assembly.
NIGERIAN TRIBUNE
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