FinMin Zainab Ahmed on Nigeria’s growth outlook, how to increase revenue base

Nigeria's Minister of Finance, Budget, and National Planning, Zainab Ahmed, recently appeared on CNBC Africa to discuss the country's economic growth outlook and strategies to increase the revenue base. The minister was at the Nigerian Stock Exchange to engage with stakeholders and explore opportunities to deepen the market and drive greater growth in the Nigerian economy. With a focus on mobilizing resources from both local and international investors, Ahmed highlighted the government's efforts to leverage the capital market for infrastructure development. Ahmed addressed the appeal from the stockbrokers' community to see the government raise more funds through the capital market. She emphasized that the federal government has been active in issuing bonds to finance projects like road infrastructure and green initiatives. Acknowledging the need for more long-term investment instruments to attract pension fund investments, Ahmed hinted at designing new financial products to meet market demands. The discussion shifted to Nigeria's latest GDP numbers, with the fourth quarter of 2019 recording a growth of 2.55%, exceeding the predictions of international financial institutions. Despite this positive momentum, Ahmed stressed the importance of sustained efforts to achieve the Economic Recovery and Growth Plan target of 7% growth rate. While commendable progress has been made over the years, the minister highlighted the need for continuous growth to outpace population expansion. Domestic revenue mobilization emerged as a critical issue, with Ahmed emphasizing the government's focus on increasing revenue through various initiatives. The Strategic Revenue Growth Initiative (SRGI) aims to enhance revenue generation across key agencies. The implementation of the Finance Act 2020, which includes VAT increases and reforms in the energy sector, is expected to bolster revenue streams. Additionally, the recent passage of the Deep Offshore Act is projected to boost revenue from production sharing contracts. Ahmed elaborated on the government's efforts to support small and medium enterprises (SMEs) by reducing taxes to stimulate productivity and tax compliance. These measures are intended to create a conducive business environment and foster economic growth. The minister emphasized the importance of addressing revenue challenges to reduce dependency on borrowing and achieve sustainable fiscal stability. Regarding the synergy between fiscal and monetary authorities, Ahmed acknowledged the evolving collaboration between the two entities. She recognized the complexities associated with managing fiscal deficits, attributing them to revenue shortfalls. Emphasizing the need to enhance revenue generation to lessen the burden of borrowing, Ahmed reiterated the government's commitment to fostering greater cooperation between fiscal and monetary policymakers. In conclusion, Minister Zainab Ahmed outlined a comprehensive strategy to drive economic growth through revenue diversification, capital market engagement, and policy reforms. With a strong focus on enhancing revenue collection and fostering public-private partnerships, Nigeria aims to sustain its economic momentum and accelerate growth in the coming years.