FG Releases 2017 Fiscal Policy Roadmap, To Drive Economic Growth
The Federal Government has released its 2017 Fiscal Policy Roadmap aimed at driving economic growth.
The new policy is set to abolish the Central Bank of Nigeria (CBN) policy exempting 41 items from the foreign exchange market.
The newly released 2017 Fiscal Policy Roadmap document prepared by the Minister of Finance, Mrs. Kemi Adeosun, provides fiscal measures to reduce pressure in the parallel market.
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According to the document, the FG:
“…Will replace administrative measures on list of 41-items with fiscal measures to reduce demand pressure in parallel market.”
The document was presented at the session, which was attended by captains of industry across key sectors of the economy, including oil, banking and telecoms.
Mrs. Adeosun said:
“The Federal Government’s 2017 Fiscal Policy Roadmap is addressing barriers to growth that will drive productivity, generate jobs and broaden wealth-creating opportunities to achieve inclusive growth”.
The Minister further stated that the President Muhammadu Buhari administration was determined to take tthe counrty out of recession.
She mentioned that the present administration will return Nigeria to a productive economy rather than one steeped in consumption.
To achieve this, government would tackle the infrastructure deficit to unlock productivity, improve business competitiveness and create employment.
FG’s 2017 Fiscal Policy Roadmap To Address Infrastructure Challenges
Mrs. Adeosun added that government would actively partner with the private sector to achieve this by use of a number of new funding platforms.
These include the Road Trust Fund, which would develop potentially tollable roads, and the Family Homes Fund.
The Family Homes Fund, is an ongoing PPP initiative for funding of affordable housing.
According to the Finance minister, the tax provision allowing companies to receive tax breaks for investment in roads on a collective basis would be reviewed.
She explained that the existing provision that enabled companies to claim relief for road projects had only been taken advantage of by two companies, Lafarge and Dangote Cement.
This was because there are only very few companies large enough to fund roads alone.
The revision would now allow collective tax relief.
This is such that companies will be able to jointly fund roads, subject to approval by FIRS and the Ministry of Works, and share the tax credit.
The policy document added that the government would revitalise refineries and increase Diaspora remittances through participation in the buyer support scheme for the Family Homes Fund.
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This is with a view to increasing the supply of US Dollars to the Nigerian market.
The Roadmap also provides for a fresh audit of the federal government debt profile.
After which it would introduce a promissory note program to finance verified liabilities and issue debt certificates to contractors of Ministries, Departments and Agencies (MDAs).
These, according to the document, would positively impact on the economy by improving government’s cash flow of businesses, improve banks’ Non-Performing Loans, (NPLs); free up banks’ balance sheet for lending to private sector; and improve business interaction.
The document indicated that the federal government would encourage investment in specific sectors through fiscal incentives.
Particular focus being given to food processing, mining and power, and would rationalise tariffs and waivers in such priority sectors.