Economist calls for cheap funds to finance ERGP
NAN-HE-26
By Olawunmi Ashafa
Plan
Lagos, April 11, 2017 (NAN) Prof. Olu Ajakaiye, an economist, on Tuesday advised Federal Government to explore low cost sources to fund the Economic Growth Recovery Plan.
Ajakaiye, the Executive Chairman of African Center for Shared Capacity Development, spoke at the Bullion Lecture of the Center for Financial Journalism with the theme “Financing Nigeria’s Economic Recovery and Growth’.
He said there was the need for government to tap various financing options for the plan to be successful.
Ajakaiye said that government needed to consider financing options like taxation, pension funds and diaspora bonds.
He also said that any attempt to finance the plan through high cost funds would compromise its validity.
Ajakaiye advised that government should not increase taxes to fund the plan.
According to him, this will be counter-productive for government to increase taxes for now.
He said that instead government should drive volume.
“The government must not plan to increase tax revenue in a way that would increase cost.
“They should not be thinking of raising Value Added Tax (VAT) to 10 per cent, rather they should mobilise more people to pay the five per cent.
“Increasing tax at a time like this will only make matters worse, so they need to focus more on volume.
“ We have done it before and can still do it again,” he said.
The economist said that it was necessary for the Federal Inland Revenue Service and the Federal Ministry of Finance to sustain ongoing reforms aimed at plugging leakages.
He commended government for introducing Tax Identification Number, approving reasonable incentives for staff of FIRS , sustained capacity building and application of information technology in tax administration.
“Tax evasion and avoidance are among the set of challenges plaguing tax administration in Nigeria and other countries,” he said.
Dr Biodun Adedipe, a management consultant in Lagos, said that government had always introduced good plans, but the problem had been with implementation.
Adedipe said there was the need to do away with internal inconsistencies that could hinder the execution of the new plan.
He said that sometimes the unwillingness of the stakeholders in seeing a project through could serve as a deterrent.
The economist cited the Lekki-Epe Expressway as an example of unwillingness of stakeholders at the beginning of the project.
Adedipe said the public had called for a Public-Private Partnership in building the road, but a number of people were not comfortable with the introduction of tolls.
“So, sometimes plans don’t get executed not because of government’s inability, but the stakeholders are unwilling to follow through,” he said. (NAN).
AWA/TA
Edited by Tajudeen Atitebi