Wale Edun, minister of finance and coordinating minister of the economy, says the federal government had “exited” servicing its debts through ways and means.
Edun spoke on Thursday at the 2024 Access corporate forum, themed, ‘Nigeria’s Economic Rebirth: Hopes and Implications’.
His statement comes days after the Central Bank of Nigeria (CBN) said it would sustain its ways and means advances to the federal government at a 5 percent limit for the 2024-2025 fiscal year.
Ways and means is a loan facility through which the CBN finances the federal government’s budget shortfalls.
Speaking on plans to boost revenue and managing finance, the minister said the government would no longer be going to the CBN to clear debts.
“We have exited Ways and Means. What does that mean? It means that the government, when it has to pay domestic debt service or foreign debt service, does not go to the central bank to debit the consolidated revenue fund of the government, which means just printing the money,” Edun said.
“But more importantly, we are putting in place, with the backing and support of Mr. President, a world-class treasury and liability management system that will take this country to where it should be in terms of financial management.”
Edun said the successful delivery of the government’s economic stabilisation plan would reinforce the gains being recorded from reforms.
The minister also said plans are ongoing to mobilise 360,000 farmers to cultivate 360,000 hectares of land to yield an estimated harvest of 1.4 million metric tonnes of maize, wheat, and cassava because “we must produce the food that we eat”.
In addition, he said the government is providing support and relief to manufacturers through fiscal measures, noting that the economic management team would be reconvened soon, as the government is documenting its economic plan.
According to Edun, the federal government aims to reduce the number of taxes businesses pay to a single digit.
“The rationale is this: 90 percent or so of the tax revenues that arrive in the government coffers comes from less than 10 taxes,” he said.
“There is ongoing work to bring down the rate of corporate income tax as we are trying to encourage investments in order to grow the economy.”
Edun said foods, pharmaceuticals, and health products will exempted from VAT, while “taxes on luxury items will be adjusted upwards”.