Governor Bala Mohammed Abdulkadir of Bauchi state, has called for a total reform in Nigeria’s financial architecture by accelerating domestic resource mobilization through tax administration.
Bala made this known during the presentation of the 2025 proposal budget estimate of N465bn at the Bauchi State House of Assembly complex.
He said that the new policy direction taken by the Federal Government, though essential, had in the short-term added to already intense pressures on households and firms.
The governor noted that It had significantly disrupted economic activities, contributing to a challenging business environment that had resulted in the exit of multinational companies and the closure of over 200 local manufacturing firms within a year.
He further said that the African Development Bank is supporting the introduction of an integrated unique identification system aimed at improving tax compliance.
“Nigeria also faces exorbitant financing costs in global financial markets, with its 30-year bond trading at a double-digit yield of 11.11% in January 2023 (and 10.58% in April 2024) compared with 8.25% at issue in 2021.
“Nigeria was unable to mobilize financing from the Eurobond market in 2023 though plans are on going to issue Eurobonds and Islamic sukuk bonds as part of the funding arrangement for the 2024 budget”
“While stabilizing the macro economy it has become critical to protect the poor and the economically insecure by a deliberate policy aimed at enhancing the social protection framework. Poverty is high and rising with a high rate of unemployment.
“Sustained poverty reduction depends on creating wage jobs through macro-fiscal stability, growth, and private sector development, complemented by building human capital. Policy initiatives for women and youth are also anticipated to improve the labour market’s poverty-reducing potential”
“The foregoing has given rise to major concerns upon which we have argued over the last few months. As sub-nationals, we had initially supported the federal government in the roll-out of these polices. We strongly believe, however, that empathy and strong consideration must be given to the plight of citizens in the implementation of the reforms”
“Rising prices require palliatives including cash transfers and grains to be provided to cushion the effect of the reforms. The impact and adequacy of the palliatives provided, in view of the needs and additional shocks caused by incessant flooding that had affected lives and livelihoods of citizens across the country, had not been commensurate. There is the need for the Federal Government to scale up the intervention measures it had introduced”
“In respect of the proposed tax reforms, it is important to note that trust deficit between citizens and Governments has been the bane in revenue generation in the country. This needs to be addressed with effective and more efficient deployment of revenues to meet citizens needs in infrastructure and services”
“Greater care must be taken to note the rate at which more Nigerians have been driven into the poverty zone. The reforms should be targeted appropriately where the weaknesses are while proper, sustained consultation and public enlightenment should be made to carry citizens along”
According to the governor, Senator Bala Mohammed Abdulkadir said “In terms of outlook and risks, economic growth is projected to increase to 3.2% by the end of 2024 and 3.4% in 2025, due to improved security, higher oil production, and stronger consumer demand. Inflation is expected to rise to 33.5% by the end of 2024, driven by higher food prices and continued depreciation of the naira, before moderating to 20.7% in 2025 as inflationary pressures abate”
“The fiscal deficit, financed by domestic borrowing, is projected to narrow to 4.3% of GDP in 2024 and 4.1% in 2025 as both oil and non oil revenues improve. The current account surplus is expected to improve to 3.0% of GDP in 2024 and 3.6% in 2025 due to higher oil exports. Headwinds include insecurity, lower oil production, rising fuel and food prices, and further exchange rate depreciation.Tailwinds include new oil production from the Dangote refinery, which is expected to lower energy prices as it starts supplying the local market” he stated.
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