The President of the African Development Bank (AfDB), Akinwumi Adesina, has called upon President-elect, Bola Tinubu to prioritize reducing the cost of governance in Nigeria.
Adesina stated this in his speech at the inauguration lecture held at the International Conference Center, (ICC), Abuja, on Saturday.
He noted that the President-elect now has an opportunity to make history, by building a resurgent, a united and prosperous Nigeria, added that “It is Nigeria’s turn”.
He stated that “Nigeria will be looking to you, as President Tinubu, on your first day in office with hope. Hope that you will assure security, peace, and stability. Hope that you will heal and unite a fractious nation. Hope that you will rise above party lines and forge a compelling force to move the nation forward, with inclusiveness, fairness, equity, and justice. Hope that you will drastically improve the economy. Hope that you will spark a new wave of prosperity. Hope to the present, as hope deferred makes the heart grow weary”
“Unless the economy is revived and fiscal challenges addressed boldly, resources to develop will not be there. No bird can fly if its wings are tied,”
“According to Nigeria’s Debt Management Office, Nigeria now spends 96% of its revenue servicing debt, with the debt-to-revenue ratio rising from 83.2 percent in 2021 to 96.3 percent by 2022″
“Debt is paid using revenue, and Nigeria’s revenues have been declining. Nigeria earns revenue now to service debt, not to grow. The place to start is to remove the inefficient fuel subsidies,”
“Fuel subsidies are killing the Nigerian economy, costing Nigeria $10 billion alone in 2022. That means Nigeria is borrowing what it does not have to if it simply eliminates the subsidies and uses the resources well for its national development,” he said.
“Rather, support should be given to private sector refineries and modular refineries to allow for efficiency and competitiveness to drive down fuel pump prices. The newly commissioned Dangote Refinery by President Buhari – the largest single train petroleum refinery in the world, as well as its Petrochemical Complex — will revolutionize Nigeria’s economy.”
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“Today, Nigeria is ranked among countries with the lowest human development index in the world, with a rank of 167 among 174 countries globally, according to the World Bank 2022 Public Expenditure Review report,” the AfDB boss added.
“To meet Nigeria’s massive infrastructure needs, according to the report, will require $ 3 trillion by 2050. According to the report, at the current rate, it would take Nigeria 300 years to provide its minimum level of infrastructure needed for development.
“All living Nigerians today, and many generations to come, will be long gone by then! We must change this. Nigeria must rely more on the private sector for infrastructure development, to reduce fiscal burdens on the government.”
“This must include improving tax collection, tax administration, moving from tax exemption to tax redemption, ensuring that multinational companies pay appropriate royalties and taxes, and that leakages in tax collection are closed,” he said.
“However, simply raising taxes is not enough, as many question the value of paying taxes, hence the high level of tax avoidance. Many citizens provide their own electricity, sink boreholes to get access to water, and repair roads in their towns and neighborhoods. These are essentially high implicit taxes.Nigerians therefore pay the highest ‘implicit tax rates’ in the world.
“Governments need to assure effective social contracts by delivering quality public services. It is not the amount collected, it is how it is spent, and what is delivered. Nations that grow better run effective governments that assure social contracts with their citizens.
“We must re-balance the structure and performance of the economy. A very common refrain in Nigeria, with every successive government, is “we need to diversify the economy.” But is it so?
“The economy of Nigeria is one of the most diversified in Africa, with the oil sector accounting for only 15% of the GDP, and 85% is in the other sectors.
“Nigeria’s challenge is not diversification. Nigeria’s challenge is revenue concentration. This is because the oil sector accounts for 75.4% of export revenue and 50 % of all
government revenue.
“The solution, therefore, is to unlock the bottlenecks that are hampering 85% of the economy.”
