The World Bank said on Wednesday that the Nigerian National Petroleum Company Limited needs to be transparent as the government drives reforms to achieve its renewed hope agenda.
It said such transparency should help ensure accuracy in the profits and oil revenues to be remitted to the federation account.
The bank also asked Nigeria to curb inflation, boost revenues and drive economic growth as part of urgent reforms that are now needed to return the economy to a sustainable path.
These recommendations are contained in the World Bank’s latest Nigeria Development Update, themed ‘Turning The Corner: From reforms and renewed hope to results’ and launched in Abuja on Wednesday.
Though the bank acknowledged the reforms that had been carried out so far, including fuel subsidy removal, liberalisation of the foreign exchange market, removal of 43 items from FX restrictions and commencing the tightening of monetary policy, it still believes that more still needs to be done to revive the weak economy.
As measures to curb inflation and stabilise the FX market, the World Bank advised the Central Bank of Nigeria (CBN) to tighten monetary policy further and phase out ways and means advances.
The World Bank believes that it would be critical to also phase out the CBN’s development finance schemes, which aligns with Yemi Cardoso’s policy direction.
It would also be critical to continue to build market confidence around free FX pricing and publish full information on net reserves to build confidence as well.
Read also: APC losing war against poverty
To boost revenue, the World Bank advised the government to publish information which explains fuel pump prices regularly.
It also advised that the government ensure transparency at its own oil company “with regards to profits and oil revenues to be remitted to the Federation Account.”
In the report, the World Bank reiterated the urgent need to raise non-oil revenues by increasing Value Added Tax rate while allowing for input tax credits, improving tax administration, adopting a data-driven approach to tax audit, as well as introduce a simpler turnover tax on Small and Medium scale Enterprises at state level rather than various existing fees and levies.
On how to boost growth, the Bretton Woods institution urged the government to develop detailed plans to improve power and transport infrastructure, public service delivery, security, and business environment.
There is equally the need for trade restrictions by adopting measures like reviewing tariffs. The World Bank said this would help reduce the costs of key inputs for producers and simplify and harmonise import and export producers while addressing current bottlenecks such as logistics and congestion at the ports.
Read also: NNPC-funded road projects face N3.56trn funding gap – Umahi
Presenting the report, Alex Sienaert, World Bank lead economist, said that the bold reforms by the Tinubu administration stopped the nation’s slide into crisis.
He said: “If we think back to the earlier part of this year, our sense was at that stage that Nigeria’s economy was sliding towards a perfect crisis. If you looked at any of the main macro indicators for Nigeria, they were deteriorating, in some cases pretty rapidly. And that was the case of growth, which was expected to remain under 3 percent and inflation was high and rising.
“The fiscal deficit was projected to remain above 6 percent of GDP, and as a result, requiring a lot of financing, by the end of 2022, for example, all of the government’s revenues was getting absorbed by the cost of repaying debts and paying interest on the debt and you can see that that trend was expected to continue.”
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
