Nigeria Plans $1.7B Economic Stimulus. Taxpayers, Govt. Employees Will Pay For It
Nigeria’s government plans in the next quarter to pump $1.76 billion into Africa’s No. 1 economy, which is in a downward spiral after the bottom fell out of oil prices, BizNews reported.
The country will pay for the economic stimulus partly by reducing the size of government and with property and sales taxes, Vanguard reported.
Finance Minister Kemi Adeosun made the announcement Tuesday as parliament prepared to pass a delayed budget.
President Muhammadu Buhari presented a record $30 billion budget in December but withdrew it a month later to make changes after oil prices fell further.
On the amended draft, Adeosun said the government planned to spend $1.76 billion in capital expenditures in the next quarter.
To pay for the stimulus, the government plans to expand the tax base and reduce the number of government workers and appointed officials, Vanguard reported.
State governors have been told to reduce the number of political appointees and aides as a way of reducing the cost of governance.
The focus for expanding the tax base will be on property taxes and consumption taxes — usually in the form of sales taxes or value added tax — to help improve revenue.
“Taxpayer education must be intensified and to expand the tax base and ensure that there is a buy-in in the revenue collection agencies from the populace,” Adeosun said.
Part of the stimulus money will help offset the debt owed to local contractors who had to lay off their workers for lack of funds.
“Companies that had laid off staff and those that had abandoned projects are going back to sites and the economy will bounce back,” she said in a statement.
The 2016 budget is expected to pass this week, senior Nigerian lawmakers said on Tuesday, according to Biznews.
Nigeria has been in talks with World Bank and has looked at borrowing from the African Development Bank and China Exim Bank to plug the budget gap as oil trades around $30 a barrel, down from over $100 in 2014.