The federal government is looking towards a reduced interest rate to attract investments and grow the economy according to the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun.
Speaking on the sidelines of the World Bank-IMF spring meeting holding in Washington D.C, United States, the Minister stated that the federal government hopes to increase its revenue base.
He noted the revenue sources of the revenue the government was looking at increasing include oil revenues and taxes. Specifically, he mentioned that the government was looking at increasing taxes without raising the tax rate but ensuring effective administration and collection.
He stated, “Even if you look at the 2024 budget, it has a significant increase 60% to 70% increase in overall government revenue projected because we need to borrow less and focus more on domestic resource mobilisation from taxes and other government revenues in particular oil. So, in that context, taxation without increasing the rate of taxes but improving the efficiency and collection is the way to go to shore up government revenue.
“The two authorities working together to stabilise the Nigerian economy, bring down inflation, stabilise the exchange rate with a target of eventually bringing down interest rate and therefore making investment through borrowing more affordable for businesses and even individuals.”
Backstory
The Central Bank of Nigeria (CBN) in the past two months has taken a hawkish monetary policy stance during its last two MPC meetings. In February, the apex bank hiked interest rate by 400 basis points from 18.75% to 22.75%. This was followed by another 200 basis points increase the following months putting MPR at 24.75%– one of the highest in the nation’s history.
The CBN has stated that its recent decisions on monetary policy were geared towards taming inflation and stabilising the foreign exchange market. Although, analysts and stakeholders have faulted the move stating it will negatively affect the real economy.
