It has been over a month since the Buhari-led APC party was re-elected to power. Ever since, there has been a noticeable shift towards a more investment-friendly environment. For instance, the Monetary Policy Committee reduced the monetary policy rate by 50bps to 13.5%.
The IMF, in its 2019 Article IV Review, stated that the Nigerian economy remains on the path of recovery. However, the Fund observed that the current level of growth is insufficient to reduce poverty and improve the quality of life of citizens.
Meanwhile, there is renewed focus on boosting tax revenue. Nigeria has a tax-to-GDP ratio of 4%. This is significantly lower than the SSA average of 16.67%. In order to expand its tax base, Nigeria could resort to online tax assessments which have gained little traction over the years.
Efforts towards sustaining the current accretion to external reserves require the adoption of new measures. They include a convergence of the multiple exchange rates, ensuring full remittance of crude oil proceeds, de-emphasizing the reliance on Eurobond sales and controlling the influx of hot money.
In this edition of the FDC Bi-Monthly publication, the FDC Think Tank analyzes these issues and their implications on business and the economy at large.
Enjoy your read.