The International Monetary Fund (IMF) has called on the Nigerian government to improve the choices on the right infrastructure projects and how to go about selecting the projects that really contributes to growth of the nation’s economy.
Noting the fact that the President Muhammadu Buhari-led administration has visibly prioritized non-oil revenue drive, IMF said certainly, increase in revenues is the way which a country creates the space to do social spending; infrastructure and other spending that benefit economic growth.
It however said revenue is not particularly the problem for Nigeria, but the spending of it. “More generally, I think it’s not just the revenue side. It’s also the spending side. Clearly improving the choices that one makes on which infrastructure project, how does one goes about selecting the one that really contributes growth,” opined Paulo Mauro of the Fiscal Monitor department of the IMF, adding: “I think there is really the need for priority to increase revenues but there is also the need to be careful about what are the ways government can make spending more efficient.”
Speaking at a press conference on Fiscal Monitor on the sidelines of the ongoing IMF/World Bank Annual meetings taking place in Bali, Indonesia today, Wednesday, Mauro identified a certain the aspect to tax policy that will help. S
“In the tax administration, to increase the compliance rate, something could be done to increase tax audit, use e-filing to greater extent, there is data matching exercise; generally try to reduce tax invasion, possibly corruption as well. Those will be priorities for the tax administration side.
“On the tax policy side, usually, what we have recommended in previous discussions is to increase excise duties on tubercle and alcohol, stamp duties is something that can be locally gained,” he stated.
On a general note, the IMF said it is time to build fiscal space against the risk of downturn, stating that building cash is crucial to economic growth and stability. “Governments should be transparent and accountable for the use of public wealth,” Director of the Fiscal Affairs Department of the International Monetary Fund, Victor Gaspar said. He remarked that government should control the dynamics of public debt to GDP ratio. “The issue of pension reform should be brought to the table. Make spending more efficient,” he added.
The IMF raised concern over the rising global debt profile, with China and the United States of America accounting for the largest chunk of the debt ratio. It said, private debt is growing in emerging markets.
The Fund calls for more spending between now and 2030 to achieve high outcomes in selected sectors (in percent of GDP).
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