МВФ призывает Нигерию расширить налоговую базу за счет повышения акцизов на топливо и тарифов на телеком

Recently, the International Monetary Fund praised the economic reforms of the government based on the macroeconomic outcomes and suggested to the government to quickly extend the value-added tax to fuel and increase tariffs on telecom to increase its revenue base. The IMF opined that those measures would boost government revenue. In making such a suggestion, the IMF recognised that the Nigerian inflation rate was in two digits, precisely moving from 15 per cent toward 20 per cent, which is partly caused by the high cost of fuel. It also knows that the nature of fuel in terms of elasticity will make it easy for the sellers to pass on the tax to consumers, which compounds the inflation. The increase in tariffs on telecommunications has the same negative effects on businesses and people as final consumers of the services. The high cost of production in Nigeria arises from inefficiencies in our production processes, including the power problem. The cost of power in production processes is enormous and part of what is making Nigerian products uncompetitive internationally. The IMF recommendations were said to aim at addressing Nigeria’s persistent low revenue-to-GDP ratio and expanding the tax base. The Nigerian government needs to be cautious of the kind of policy prescriptions these institutions give at all times. The IMF is an economic institution that implies they should understand that the policy prescription given is wrong and will be injurious to our development. Although the Nigerian government has not adopted the IMF policy for now in view of public outcry, there is a likelihood that it will walk back into adopting the policy. We have to let the government realise that it should adopt the policy of output and employment generation to increase the revenue rather than generating revenue through taxation. The local economists are also experts and cannot deceive the government since they are also beneficiaries of a working economy. The Nigerian government, like governments in many other African countries, has special respect for policy prescriptions from the Washington institutions, i.e., World Bank and IMF, not only because of the calibre of experts but also because of the financial recommendations/supports they provide at credit request points. What these governments have failed to realise is that, apart from the traditional agenda relating to the Washington Consensus on old age, the economists in the United States or elsewhere in advanced economies use the prisms of their economies to judge happenings in economies in developing countries in Africa, where a lot of structural rigidities often make textbook economic prescriptions fail in this clime. A truly market economy does not exist in Africa, except in South Africa, which has advanced in most aspects. For example, during the 2007/2008 global economic crisis, most African countries were not affected by the crisis until two years later, whereas South Africa was caught up immediately with the rest of the world because it was and remains a market economy. The doctrine of market forces or market economy on wholesale cannot work here. Stronger levels of market intervention are required in many sectors of an economy in Africa than in advanced and emerging economies of the G20. This is particularly true of prices, including the foreign exchange market, interest rates, commodity markets, and even labour markets. It takes a longer time for such interventions to succeed than in advanced economies. Studies have shown that economic policies, particularly monetary and fiscal take longer time after implementation to have effects in developing countries because of such factors as economic dualism or existence of strong informal sector side-by-side with formal sector, limited array of financial instruments for the market, high level of liquidity in the economy through government spending and individual preference for holding and spending cash, and huge government deficit financing through ways and means, despite of existence of regulation against such. There is always the need for policymakers in the local economy to take serious, advice from their local experts, who naturally would want the economy to progress. I can recall an incident during the 1992 Presidential election campaign in the United States when the World Bank was discouraging government subsidies for agriculture in Nigeria and possibly in some parts of Africa, while the incumbent President in the United States was campaigning to strengthen agricultural subsidies in the United States. I was confused at the time because while in Nigeria, the debate was seriously on among economists, agricultural economists, or agricultural experts generally, with some supporting the World Bank’s position and others against it; and at that same time, I got to the United States, the home of the World Bank, with the full support of the Presidency’s agricultural subsidy without a dissenting voice. And, actually, there was a full subsidy which still exists today. The same thing happens in the case of government participation in an economy. It is one of the conditionalities of the IMF that the government’s participation in an economy should be minimised. Also, international trade should be liberalised such that free trade is encouraged everywhere. Recent studies have shown that in most of the advanced economies, government participation is increasing regularly, particularly for start-ups or where the initial capital outlay is very large. Secondly, President Trump’s recent actions on tariff imposition on trade across the globe have punctured the validity of free trade. Here, we are still living in the era of this past world, and these doctrines are still being recommended and adopted. We do not need to discuss the effects of the Structural Adjustment Programmes, which produced more failures than success stories. Let us believe in ourselves and our experts. Serious countries run their economies on the outcomes of research and experts’ advice. Many times, we have suggested to the Federal Government the need to seek improved revenue from improvements in productivity and outputs rather than from taxes, which is a withdrawal from the economy and may not get back to the economy in the form of government expenditure, particularly if it is used to pay external debts. In addition, the government must prevent revenue leakages through under-reporting, misapplication, mismanagement, and corruption generally. Economic policy, particularly monetary, should be formulated towards enhancing credit affordability and availability, as well as reducing or eliminating government crowding out of the private sector in the credit market.