African Integrity Magazine – Fiscal and Monetary Policies of Government must ensure synergy in it’s choice of direction”.

Fiscal and Monetary Policies of Government must ensure synergy in it’s choice of direction”.

Nov 16, 2023 Samuel Issues 0

Dr. Adeshile

“Fiscal and Monetary Policies of Government must ensure synergy in it’s choice of direction”.

Dr. Deji Adeshile is a Financial Manager and a proficient management consultant with over 16 years of professional experience in financial advisory, accounting, assurance, management consultancy, and tax advisory. As the Chief Executive Officer of Motherpearl Consulting Limited, he led the team that developed Outline Business Cases (OBC) and Financial Model (FM) for the Integrated revenue assurance solution for the Oil and Gas Industry towards the effective implementation of the Petroleum Industry Act, 2021, under a proposed Public-Private Partnership Financing and Investment arrangements.
In this interview with African Integrity Magazine, Dr. Adeshile analysis various issues on the Financial and Economic policies of the Nigerian Government.

As a financial expert, what do you think is the best approach to resolving Nigeria s Forex crisis?

The best approach to resolving Nigeria’s FOREX crisis is by addressing the prime forces working against the demand and supply of FOREX. This means that deliberate monetary and fiscal policies should strengthen Export promotion through global partnership and collaboration thereby earning more in foreign currency. This should be supported with a mechanism to ease repatriation of funds into the country. Furthermore, efforts should be geared towards driving human capital development as well as repositioning existing local industries and startups by providing easy access to finance for diversification and expansion for global competitiveness.

Do you share the opinion that the total subsidy removal and the floating of the Natra are two extreme poles that shouldn’t have been taken the same time?

From the standpoint of a market economy, forces of demand and supply determine prices all things being equal. The market economy drives competition and innovation. Therefore the government is justified in taking its poston on subsidy removal on PMS and at the same time floating of the Naira. The question here is, can we have a cheaper price for energy without necessarily subsidising it? Can the government deploy monetary and fiscal policies to push for price affordability of energy and energy for all? Considering that the two policies are right for a well-meaning economy, the government should accelerate the mobilization of resources for more energy options and price affordability on one hand and the other hand, facilitating more earnings and inflow of foreign currency through export promotion as well as repositioning local industries for competitiveness.

Will you advocate for the Government to grant tax concession to serve as relief against drastic economic measures taken so far by the Nigerian Government?
Economic development comes at a cost.

How do we finance our development? The several financing options include borrowing, equity FDI or through domestic revenue mobilization. (e.g. taxes and levies). There have been many concerns as to the Nigeria’s debt sustainability index. Taxes are one of the key revenue sources for development. Therefore, t would rather advocate that the government should concentrate on the continuous improvement of the enabling environment for businesses to strive by streamlining taxes and levies collected by the three tiers of government, leveraging technology to provide integrated revenue assurance and making taxpayers’ money work better for targeted development.

Currently, there are existing tax reliefs and incentives for businesses such as the pioneer status which grants qualifying businesses tax holidays, the Executive Order on the Road _ Infrastructure Development and Refurbishment Investment Tax Credits Scheme for qualifying businesses, the free trade / special economic zones regulations under the NEPZA Act which provide some tax and import tariff incentives, amongst other options. Also, there are some consolidated relief allowances embedded in the personal income tax law for individuals with certain tax relief considerations for income earners below a certain threshold.
There are news on some palliative measures pronounced by the governments at both national and sub-national levels. Those pronouncements should be backed with timely action. Though the palliative measure is meant to be temporary. What is more sustainable is providing an enabling environment for innovation and price affordability through easy access to finance and human capital development.

As a Chartered Accountant, are you of the opin that the current Central Bank administration, like the ones before it should also delve into some sort of Fiscal policies, as a way of complimenting the efforts of the Fiscal Arm of Government or it should strictly concentrate on fine tuning a durable Monetary Policy!

Monetary policy formulation and implementation is the core mandate of the Central Bank of Nigeria while the Ministry of Finance / Budget and National Planning champion Fiscal formulation and coordination. There should be a clear segregation of duties for checks and balances. However, the two organs of government must ensure synergy in its choice of policies. Monetary and Fiscal policies should achieve a common goal at a time to avoid policy somersault.

Do you think the idea of giving stipends to the most vulnerable instead of committing such funds for production and the general well-being of Society makes economic and financial sense?

The question is, can that measure be self-sustained? A self-sustainable social safety and security measures are meant to be driven by economic empowerment programmes through human capital development and entrepreneurship. Giving stipends should be seen as a temporary measure pending the full rehabilitation of the most vulnerable. A full rehabilitation programme can be in the form of developing costeffective clustered shelters for vulnerable orphans, the displace, the less priviledged and others. Other options are addressing out-of-school situations, and further strengthening the pension, health and social insurance sector to timely indemnify qualified contributors, among other programmes to rehabilitate the most vulnerable.

Irrespective of the option chosen by government at the national and sub-national level, they should embrace the Accountability Index (Al) advocated by the Institute of Chartered Accountants of Nigeria (ICAN) as part of the overarching tools to drive the economy, efficiency and effectiveness of public finance management.

Irrespective of the option choosen by government at the national and sub-national level, they should embrace the Accountability Index (Al) advocated by the Institute of Chartered Accountants of Nigeria (ICAN) as part of the overarching tools to drive the economy, efficiency and effectiveness of public finance management.