FEDERAL GOVERNMENT INITIATIVES TO REVAMP NIGERIA'S ECONOMY
The Federal Government of Nigeria has announced a series of initiatives aimed at stimulating economic growth through reduced corporate taxes, single-digit interest rates, and support for local manufacturing. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, shared these plans during Access Bank’s 2024 ‘Corporate Customer Forum’ in Lagos.
Key Initiatives:
1. Tax Reductions: The government intends to lower corporate income tax to enable businesses to retain more capital for growth and investment. There will be a shift in tax burdens, with increased taxes on luxury goods while essential items, such as food and pharmaceuticals, will be exempt from VAT.
2. Interest Rates and Mortgages: The introduction of long-term low-interest rates and 25-year mortgages aims to create a conducive environment for the private sector, particularly in manufacturing.
3. Consumer Credit Schemes: These schemes will facilitate the purchase of durable goods, stimulating the manufacturing sector and enhancing economic activity.
Industry Perspectives:
Aliko Dangote, Africa’s richest man, commended the government’s efforts but emphasized the need for stronger domestic investments. He argued that without domestic investment, foreign investments will be limited. Dangote highlighted the importance of protecting local industries, especially small and medium enterprises (SMEs), from unfair competition with foreign manufacturers benefiting from subsidized loans.
Government Support for SMEs:
The government is recognizing the critical role SMEs play in the economy, with initiatives such as N50,000 grants for small businesses and nine percent loans for larger SMEs. This is part of a broader commitment to reducing production costs and increasing output to combat inflation.
Collaborative Strategy:
The economic strategy has been developed in consultation with key stakeholders, including the Manufacturers Association of Nigeria (MAN) and the Nigerian Economic Summit Group (NESG).
Economic Outlook:
Bismarck Rewane, CEO of Financial Derivatives Company Limited, projected that the Nigerian economy could grow at 3.5 percent by 2026, reaching approximately $400 billion. However, challenges remain, including high electricity and telecom tariffs.
The Federal Government of Nigeria has announced a series of initiatives aimed at stimulating economic growth through reduced corporate taxes, single-digit interest rates, and support for local manufacturing. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, shared these plans during Access Bank’s 2024 ‘Corporate Customer Forum’ in Lagos.
Key Initiatives:
1. Tax Reductions: The government intends to lower corporate income tax to enable businesses to retain more capital for growth and investment. There will be a shift in tax burdens, with increased taxes on luxury goods while essential items, such as food and pharmaceuticals, will be exempt from VAT.
2. Interest Rates and Mortgages: The introduction of long-term low-interest rates and 25-year mortgages aims to create a conducive environment for the private sector, particularly in manufacturing.
3. Consumer Credit Schemes: These schemes will facilitate the purchase of durable goods, stimulating the manufacturing sector and enhancing economic activity.
Industry Perspectives:
Aliko Dangote, Africa’s richest man, commended the government’s efforts but emphasized the need for stronger domestic investments. He argued that without domestic investment, foreign investments will be limited. Dangote highlighted the importance of protecting local industries, especially small and medium enterprises (SMEs), from unfair competition with foreign manufacturers benefiting from subsidized loans.
Government Support for SMEs:
The government is recognizing the critical role SMEs play in the economy, with initiatives such as N50,000 grants for small businesses and nine percent loans for larger SMEs. This is part of a broader commitment to reducing production costs and increasing output to combat inflation.
Collaborative Strategy:
The economic strategy has been developed in consultation with key stakeholders, including the Manufacturers Association of Nigeria (MAN) and the Nigerian Economic Summit Group (NESG).
Economic Outlook:
Bismarck Rewane, CEO of Financial Derivatives Company Limited, projected that the Nigerian economy could grow at 3.5 percent by 2026, reaching approximately $400 billion. However, challenges remain, including high electricity and telecom tariffs.