Special Adviser to the President on Revenue, Mr. Zaccheus Adedeji, in this interview, discusses how the President Bola Tinubu Administration is working to raise the country’s revenue profile, ensure sustainable financing and ongoing reforms that would positively transform the nation’s economic fortunes.
The last three months have been difficult for Nigerians following the economic reforms launched by President Tinubu. Is the President on the right track to fulfill his election promises?
For this government, it is not simply about the present moment or what the President has done within the short term of being in office, it is more about the medium to long-term.
We are laying the foundation for a prosperous future. You will agree with me that even though the foundation is the most important structure of a building, it is not always the prettiest. Once the house begins to take shape, the beauty will not only be apparent for all to see, it will also provide the shelter to shield the occupants from unfavourable external conditions.
We have done a lot that I am proud of within this short period, these include addressing some critical concerns of the private sector regarding pressing tax issues, removal of wasteful subsidy on petrol to create fiscal headroom and limit excessive borrowing and forex reforms to address market distortions. So, I can say that we are on track and moving in the right direction.
What approach is this administration taking to help Nigerians who are bearing the pain of high cost of living as a result of fuel subsidy removal?
You will recall that Mr. President signed some executive orders on July 6, which reversed the tax increases on manufacturers, and suspended the excise tax imposed on Single Use Plastics which would have affected mostly Small and Medium-sized Enterprises, SMEs, and potentially trigger higher prices and further inflation.
The orders also deferred the commencement date of various changes introduced via the Fiscal Measures and Finance Act 2023 to give individuals and businesses reasonable time to adapt to the changes without major disruptions to their operations and livelihoods.
The removal of wasteful subsidies on PMS and forex have stopped the haemorrhage on our treasury and will ensure that government is on the path to sustainable financing with less dependence on the Central Bank of Nigeria, CBN, overdraft for public finance.
While some of these measures have unfortunately created short-term pains for many people, we are confident that Nigerians will start to reap the benefits sooner rather than later.
Are there plans to reduce the nation’s dependency on a single sector for revenue generation?
We believe that Nigeria is blessed if only we can improve our policy environment and enhance the efficiency of both the private and public sectors. This is one of the reasons the President recently approved the setting up of a Presidential Fiscal Policy and Tax Reforms Committee comprising eminent Nigerians to not only advise the government on the necessary reforms but also support the implementation.
Ultimately, the outcome of the committee’s work and other policy actions of the government will result in productive diversification of the economy, government revenue sources and foreign exchange earnings.
What strategies are in place to attract foreign direct investment and ensure a conducive environment for potential investors?
Mr. President’s philosophy is that we should not tax investment but returns on investment. We should not tax production but consumption. We should not tax poverty but facilitate prosperity and share it through fair and progressive taxation.
The market-friendly disposition of this administration is already creating excitement in the capital market with over 20 per cent growth, which is the best performance in 15 years. We are also working on reforms to create more jobs and entrepreneurship opportunities in the digital economy, especially for our teeming youth.
We recognise that Nigeria can not continue to rely on the oil and gas sector as the mainstay of the economy, especially with the uncertainties surrounding global oil prices which create shocks in the economy whenever there is a crash in price like we experienced from 2014 till 2018.
President Tinubu promised to build a more vibrant and prosperous economy, he is set to achieve this by ensuring that other sectors of the economy like agriculture, solid minerals, and maritime perform optimally.
Can you explain the ways through which the funds derived from subsidy removal can be used to ensure economic stability?
Premium Motor Spirit, PMS, and forex subsidies were not only wasteful, they also promoted inefficiencies in our resource management and created economic distortions making it difficult to attract both domestic and foreign investments. By removing them, the government at all levels has less need to keep borrowing to fund public spending and the savings can be channelled towards building infrastructure and social services to reduce multidimensional poverty and build a competitive economy. For any economy to be productive, you need critical infrastructure that supports business growth and improves the quality of life, especially roads, power, rail, broadband, and pipelines among others.
These are heavy and capital projects that only the government can provide. Usually, investors go to places where they don’t have to worry about all of these things.
The government will re-invest the money saved from fuel subsidy to grow the infrastructure stock of the country and fund social services in education and healthcare.
Why do you think Nigerians should trust President Tinubu and the team he constituted to work with him on his ‘Renewed Hope Agenda’?
The crux of the agenda of this government is economic prosperity, which is inclusive and sustainable. Mr. President has made his appointments based on competence with a good number of technocrats appointed to manage various aspects of the economy. Even the politicians that have been appointed by him are those with proven records of performance.
I can say that we are moving in the right direction and making progress and I am confident that Nigerians will begin to see the benefits of this administration’s policies sooner rather than later. The future is very bright.