It is no longer news that the dwindling prices of oil at the international market is affecting Nigeria’s economy. This is so because Africa’s most populated country depends largely on its oil to sustain the nation’s finances.
Having emerged president in a keenly contested election in March this year, Nigerians are hoping President Muhammadu Buhari will save the nation’s economy from collapse, and indeed keep the country afloat in these trying times.
Naij.com has identified five ways that the president can cope in order to balance the books for the sake of many Nigerians who will definitely be affected by these changes.
1. Ensure all debts owed by foreign nations are paid: Some neighbouring countries who rely on Nigeria’s oil have not paid their outstanding debts. It is time for the Nigerian government to aggressively follow up with these debts and ensure that every kobo finds their way back into the coffers of Nigeria. It seems like the Buhari administration has started this as the Nigerian and Ghananian government recently reached an agreement with the modalities to settle the outstanding debt amounting to N33.8bn, for the gas the country’s Volta River Authority (VRA) received from a Nigerian company, N-Gaz meant for power generation.
2. Merge government ministries: Many agencies and parastatals under the federal government are dormant and they are not relevant presently. To save cost, the federal government should merge some of these agencies whose duties are similar. For instance, the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices Commission (ICPC) have no business been separate entities. The merger process would no doubt have casualties in terms of job loss, the federal government should see to it those affected are adequately compensated.
3. Aggressive tax regime: The federal government should employ the use of taxation to boost its revenue and indeed diversify the economy. The focus on increasing tax revenues will definitely cushion the effects of the country’s falling oil prices. Indeed, the potential to attain a diversified base to increase non-oil taxes as a percentage of Nigeria’s Gross Domestic Product (GDP) is possible.
4. Punish Tax Evaders: Companies or individuals who fail to meet their tax obligations should be subjected to punishment to serve as a deterrent to others Companies especially, should be encouraged to adopt automated business solutions that will prepare them for a tough tax regime.
5. Tax the rich more: A new tax regime should be in place where the elites in the society should be mandated to pay more because of their deep pockets and indeed the number of businesses they own and their expensive lifestyle. Nigeria’s wealth is concentrated on a few people, some of who are wealthier than most states in the country. The federal government should beam its searchlight on these wealthy individuals so that they can contribute positively for the government’s revenue generation drive.