FG Unveils 10-Point Agenda to Pull Nigeria Out of Recession

FG

Nigeria’s Finance Minister, Kemi Adeosun, has unveiled a document, the 2017 Fiscal Road map, which is aimed at pulling Nigeria out of recession.

Kemi Adeosun

Here are the propositions in the document:

1. Recognise inherited debt profile after a robust audit process:

• Introduce promissory note programme to finance verified liabilities
• Issue debt certificates to contractors, Ministries, Departments & Agencies (MDAs), and State overnments
• Improve cash flow of businesses
• Improve Banks’ Non-Performing Loans (NPLs)
• Free up Banks’ balance sheet for lending to private sector
• Improve government’s business interaction with the private sector

2. Mobilise private capital to complement Government spending on infrastructure:

• Roads Trust Fund
• Family Homes Fund
• Extend infrastructure tax relief to a collective model to attract clusters of corporate entities
• Expand the provision of infrastructure
• Drive growth of non-oil sector.
• Drive economic growth

3. Strengthen fiscal/monetary handshake:

• Replace administrative measures on list of 41-items with fiscal measures to reduce demand pressure in parallel market
• Encourage domestic food production through specific incentives e.g. accelerated depreciation on food manufacturing equipment and Zero (0%) duty on green houses
• Planned revitalisation of refineries
• Increase Diaspora remittances via participation in the buyer support scheme for the Family Homes Fund
• Reduce demand for US Dollars
• Increase supply of US Dollars

4. Incentivise exports:

• Restructure the Export Expansion Grant (EEG) to a tax credit system
• Rationalise tariffs and waivers in key export sectors
• Encourage/incentivise non-oil exports
• Drive import substitution

5. Encourage investment in specific sectors through fiscal incentives:

• Accelerated depreciation on equipment in strategic sectors e.g. food processing, mining and power
• Rationalise tariffs and waivers in priority sectors
• Drive investment in strategic sectors

6. Continue expansion of fiscal space through revenue enhancement and cost consolidation:

• Customs Single Window (being implemented through a Private Public Partnership (PPP) scheme)
• Template for non-allowable expenses for government agencies.
• Overhead cost control by the Efficiency Unit
• Continuous risk based audit by the Presidential Initiative on Continuous Audit
• Revenue enhancement
• Cost containment

7. Improve fiscal discipline at Sub-National level:

• Extension of efficiency unit at Sub-National level
• Fast track municipal bond issues to deepen the bond market
• Conversion to International Public Sector Accounting Standards by all State Governments.
• Improved fiscal position at Sub-National level

8. Enable and accelerate Recoveries process:

• Whistle-blower scheme
• Centralised database on recovered assets
• Asset tracing
• Professional management of recovered assets
• Increased efficiency of Recoveries process
• Increased budgetary funding availability from Recoveries

9. Rebalance debt portfolio to extend maturity and optimise debt service cost:

• Rebalance public debt portfolio with increased external borrowing (60:40 target)
• Extend maturity profile of public debt portfolio
• Deploy long-term debt instruments including Infrastructure and Retail Bonds
• Maximise use of concessionary loans
• Rebalanced debt profile withimproved debt service to revenue ratio

10. Catalyse Micro, Small and Medium Enterprise (MSME) growth through specific measures to improve capacity and access to finance:

• Development Bank of Nigeria (US$1.3bn)
• Increase share of business awarded to MSMEs from Government contracts
• Tax harmonisation and tax incentives
• Accelerated depreciation