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IMF Urges Nigeria To Improve Tax Revenue

The International Monetary Fund has said that with the size of Nigeria’s economy, the country has the capacity to repay it’s debt.

The Fund, which described Nigeria as a trustworthy ally adviced the federal government to always put in place fiscal buffers during the time of surplus that it could fall back on during the period of economic challenges.

The federal government had in recent times come under heavy criticisms for its debt accumulation.

During the COVID-19 pandemic in 2020, IMF executive board approved $.4bn as emergency support for Nigeria to address the pandemic.

The facility which came through the Rapid Financing Instrument was part of efforts in addressing the severe economic impact of the COVID-19 shock and the sharp fall in oil prices.

Speaking on the development, IMF Resident Representative in Nigeria, Mr. Ari Aisen advised Nigeria and other countries in the African sub-region to prioritize their spending in the era of economic downturn.

Aisen was amongst panelists assembled over the weekend by Nigerian Economic Summit Group to provide perspective on critical challenges confronting Nigeria economy ahead of 2023 forthcoming general elections.

He said, “When you face a shock, you need someone to lend you a hand. Of course, you will be paying your debt. There is no doubt that Nigeria with a big economy will be able to repay its debt and will pay all creditors.

“I think it’s very important that we keep that in mind otherwise without these financing, adjusting to challenges will be too painful. You will not be able to pay salaries, you accumulate arrears, you will not be able to face emergency if you have not accumulated the right buffers in the good time.

“It’s important for Nigeria to have development partners that they can even provide financing in terms of need. There should not be any pride in requesting for assistance in and out of emergency basis. Of course, the right economic policy should be developed.

“In IMF, we advice people to develop capacity. Our member countries should be able to develop buffers. The facility IMF gave Nigeria at the time of COVID-19 pandemic was to help in buying oxygen mask, stocking hospital with vital equipment to face the pandemic.”

The IMF Country Representative called for adoption of robust tax system in Nigeria as revenue from oil is no longer sustainable.

“On the question of tax, we need a tax system that is progressive. In Nigeria, there’s a lot of funds to finance with public good; in health, education, nutrition, security, policing. There are many things to be financed with funds.

“The decision by tax payers and the government must be such that trust can be built. The delivery of public goods should be transparent.

“Good governance in an accountable way can be delivered by the government. Make use of the collections in the best possible way. If you put these two things together, there is a chance that the government will collect more and the government will deliver the services to the people.

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