Release Of 5 Billion Naira Will Cause Spike In Inflation:Wale Edun

 

 The Minister of finance and Coordinating Minister for Economy Mr. Wale Edun said that releasing 5billion naira to each state of the federation  may possible cause a spike in  inflation and to avoid such  scenario, he said government opted for the release of only 2 billion naira as  palliative.

  The Minister, at a media press briefing in Abuja clarified  the N5 billion was combination of loans and grant.

He said " On N5  billion, it's a combination of grant from the federal government and borrowing by the state

Though the sum N5  billion is the amount, you will agree with me that to release such fund at once across all the states will be self defeating.  It  could lead to an inflationary spiral, exchange rate changing. So it is N2  billion naira that has been released as an  initial intervention and the FCT will be included" .

" The president is going to deliver a better life to Nigerians by encouraging investment that increases productivity that grows the economy and there by creating jobs and reducing poverty".

Edun admitted that the country wasn't where it ought to be, as all the indices of growth and development are in the negatives.

"We are not where we should be. The  economy is barely growing above the rate of population growth. But it was not not always so.  I think in trying to see the way forward, if we look back, we now have a situation of slow growth , double digit inflation, weak and  depreciating exchange rate as well as security concerns . 

That's resulting in an economy that is not growing ; that is not lifting  Nigerians out of poverty.If we think back  to when was the last time when the economy was stable , when it was growing when inflation was low when the exchange rate was stable and when interest rates were affordable , that period is about a decade ago "

Growth was above 6% around 2013  2014, and it was because from around 2010  there was a commodity  world wide -  oil prices and volumes were high . Nigeria and the government earned into it's coffers over $  80 billion  per annum compared to the figure now at around $25 billion. 

What that points to, is that there was a time when government had enough foreign exchange, it  had enough naira revenue to meet it's obligations and provide the funding for growth of the economy  . 

It  had enough foreign exchange such that when people came in to invest and they needed to import raw materials  and machinery, government could provide the wherewithal.  what that points to,  is that we have a situation where if government doesn't have the money it needs to facilitate and allow private funding-  other sources of funding such as foreign direct investment, domestic investment by Nigerians in all areas.  We  saw some of that in Lagos  when Mr president was governor.

He  opened up the power sector to private investment, the road sector , infrastructure, waste management and even cemeteries to private investment because government did not have the funds and there those who were willing and able to provide jobs and grow the economy by making those investments", he said.

The Minister said President strategies revolves around private investment, noting that, "world wide there are huge flow of foreign direct investment once you give investors the right conditions.

"Where we are headed? He  has pointed out in eight priority areas where  he's going to take Nigerians and his key priorities to improve the lives of Nigerians  by providing food security by ending poverty.

His plan for the economy is economic growth, job creation , access to capital particularly  consumer credit that makes goods affordable  to the ordinary Nigerians. 

And his concerned about utilizing our vast  capable human resources by focusing on inclusivity, women, youth , making all have the opportunity to come to the table and  contribute to the growth of the economy and society and likewise by focusing on security, rule of law, and anti corruption, he tends to create a fairer and safer playing field for all", he added.

 Speaking at the session, Chairman fiscal policy and tax reforms  Taiwo Oyedele said his committe was reviewing  tax incentives with a view to expunging incentives that distort economic growth.

According to Oyedele, instead of granting tax waivers to businesses, the government should create an enabling environment for businesses to thrive and pay more taxes.

He added that  if Nigerians were paying the right taxes, the nation would have gotten extra N20 trillion from tax collection annually. 

The current administration has said it would introduce tax reforms to phase out multiple tax system and ensure Nigeria has a fair, convenient and equitable tax system.