The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, has unveiled a series of proposed fiscal measures during an exclusive interview on AIT’s Money Line.
The new policies, set to be formalised through the upcoming Inflation Reduction Act, include tax breaks for companies that increase their workforce and expanded suspension of import duties on select goods.
“The federal government is committed to fostering a more robust economic environment by incentivizing companies to hire more employees,” Edun said.
“We are introducing outright tax breaks for businesses that increase their staff numbers. This is part of our broader strategy to reduce production costs and alleviate inflationary pressures.”
The Inflation Reduction Act, which is expected to be signed into law by the President in the coming weeks, represents a comprehensive approach to economic stabilization.
According to Edun, the act will feature a range of fiscal incentives designed to alleviate the financial burdens faced by businesses due to the depreciation of the naira and other economic challenges.
“These tax breaks are aimed at reducing the cost of production,” Edun explained. “Companies will receive tax relief proportional to the number of new employees they hire.
Additionally, the act will include various import duty exemptions and tariff reductions.”
The Minister’s announcement comes in response to ongoing concerns about rising inflation and its impact on both businesses and consumers.
The Nigerian government has been grappling with inflationary pressures exacerbated by fluctuating exchange rates and high costs of imported goods.
In a related move, the government is also set to broaden the suspension of import duties on certain essential goods.
This measure is part of a concerted effort to combat inflation by making critical imports more affordable.
Edun highlighted that the government is particularly focused on food security, noting that substantial resources are being allocated to ensure the availability of homegrown produce while allowing for selective importation when local supplies are insufficient.
“Our goal is to balance the needs of local farmers with the immediate requirement to keep food prices in check,” Edun stated.
“We will only permit imports when local supplies have been exhausted. Auditors will oversee this process to ensure that we are not undermining our local agriculture sector.”
The Minister also touched on the issue of Nigeria’s fuel import bill, which amounts to approximately $600 million per month.
He revealed that a significant portion of this expenditure benefits neighboring countries in Central Africa, underscoring the need for more strategic management of fuel imports.
In response to questions about the government’s approach to managing its financial obligations, Edun clarified that the federal government has not sought advances from the Central Bank of Nigeria (CBN) for government debt or salaries, known as Ways and Means advances.
Instead, the government has been utilising market instruments to reduce its debt load.
“The increase in the Ways and Means limit to 10 percent is a precautionary measure,” Edun explained.
“It provides us with additional flexibility to cover expenses if there is a timing mismatch between revenue inflows and outflows. However, we have not used this facility to date.”
These fiscal measures are part of the government’s broader strategy to stabilize the economy, manage inflation, and create a more conducive environment for investment.
By addressing both the cost of production and the availability of essential goods, the government aims to foster economic growth and job creation.
The proposed tax incentives and import duty reliefs are expected to play a crucial role in alleviating the economic pressures faced by Nigerian businesses and consumers.
As the Inflation Reduction Act progresses through the legislative process, stakeholders are closely monitoring its potential impact on the country’s economic landscape.
