Adeyemo, highest-ranking Nigerian-American official, applauds Nigeria’s economic reforms

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  • Says stable naira, fiscal policy rejig key to woo US investment

  • Tinubu seeks deep economic ties with South Africa

  • New FIRS Chairman takes over, targets 18% tax-to-GDP in three years

A senior US official on Monday applauded tough reforms taken by President Bola Tinubu since coming to office in May, saying they provided an opportunity for Africa’s largest economy.

Visiting Lagos on a trip to improve US-Nigeria economic ties, the US Deputy Secretary for the Treasury, Wally Adeyemo, echoed praise for Tinubu’s reform package at a “critical moment” for Nigeria.

“The opportunity has never been greater. Your government is pursuing difficult and bold reforms,” he said in remarks at the Lagos Business School.

Adeyemo, 42, the highest-ranking Nigerian-American official, was also due to meet US companies in Nigeria and tour a tech incubator in Lagos for startups.

He said Nigeria needed to stabilise the naira currency, and lauded “difficult steps” taken so far by the government.

“The path to unification is not easy, but going backwards would be even worse,” Adeyemo said.

He also called on the government to implement investments using resources from the abandoned fuel subsidy in areas from infrastructure, education and small business to agriculture.

Also on Monday, President Tinubu advanced his economic development diplomatic drive for investment attraction as he engaged extensively in a bilateral discussion with the South African President, Cyril Ramaphosa, in New York City, ahead of the United Nations General Assembly.

President Tinubu asserted that Africa must have a consensus view that the hundreds of billions of dollars spent through International Development Finance Institutions over the years must meet the specific needs of developing democracies in Africa, even if it is done with exclusive regard for their own enlightened self-interest.

“During the end of the Second World War, the Marshall Plan was established for the reconstruction and economic restoration of European nations through Bretton Woods institutions. Where has this presence been for Africa? We have to be careful not to replace the broken shackle of yesterday with a new set of shackles. You cannot have a stable democracy in the presence of a poverty of knowledge and a starvation of people. Democracy without food on the table is a breeding ground for what will consume us, if care is not taken. We must join hands and agree that International Finance Institutions require reform as Africa is not to be a ground for economic scavenging any longer, but it is a place with gifted people that is ready for investment and cooperation.

“We have all the human and natural resources required between our nations. We can collaborate in a mutually beneficial way that enriches our populations. South African Mining industries have a role to play in the Nigerian solid minerals development sector. Your business community has done well in Nigerian Telecommunications. We have great mineral wealth across our land, and you have good expertise in this area. We expect to deliver jobs and mutually beneficial results in this area as brother and sister countries,” the President affirmed.

Referencing President Tinubu’s quick implementation of what he called “brave” economic reforms, the South African President agreed that the two countries have much more wealth to create together in close and intentional partnership, with each nation leveraging on each other’s respective strengths.

“We are two major economies on our continent, and it is important that we deepen economic ties, particularly in light of the African Continental Free Trade Agreement. We are very keen on the deepening of our economic relations,” the South African President said.

He emphasized that history has proven that Nigeria and South Africa can move the world on matters of mutual concern when the two nations operate on the same wavelength.

“We would love to see Nigeria and South Africa working closely together on a number of issues because whenever we join hands, we have made an impact globally through those joint positions. Together, we can move the global south forward. We are a continent that has been plundered. And wealthy nations made so much of it from us, and we must seek out partners who will help us to advance our own interests,” the South African President emphasized.

Recognizing President Tinubu’s effective stewardship as the Chairman of the ECOWAS Authority of Heads of State, the South African leader said that Southern Africa needed to emulate the solidarity being demonstrated in West Africa, following the Niger Crisis.

“We believe that we have a lot to learn from ECOWAS and its unity in reaching consensus positions on sub-regional matters. This is something we seek to emulate in the Southern African sub-region in view of events in Mozambique and other areas,” President Ramaphosa said.

The South African leader also used the opportunity of the bilateral engagement to extend an invitation to President Bola Tinubu to visit South Africa, following President Ramaphosa’s recent visit to Nigeria, as part of efforts to deepen economic ties and the broader relationship between both countries.

While accepting the invitation, President Tinubu affirmed that an Africa, in which Nigeria and South Africa are working in synergy to advance their common interests, is the strongest version of the continent, which can make more impact on global affairs for the benefit of over one billion Africans with its enormous human and natural resource wealth.

“Our continent is the last untapped ground for accelerated, massive growth and new economic opportunity on earth. We must be in charge of our own resources, and we must work to use each other effectively to achieve what is best for all of us, Mr. President. We look forward to an era of economically productive relationships,” the Nigerian leader concluded.

In another development, the newly appointed Acting Chairman of the Federal Inland Revenue Service, Zacch Adedeji, on Monday set a lofty 18% tax-to-GDP ratio target to be attained by the Federal Government in the next three years.

Adedeji was speaking as he took over from his predecessor, Muhammad Nami, who was directed last Thursday by President Tinubu to proceed on three months of pre-retirement leave ahead of his formal exit by December this year.

“Our aspiration is audacious – to surpass Africa’s average tax-to-GDP ratio of 16.5% and achieve an impressive 18% within three years.

“By doing so, we aim to reduce our nation’s reliance on borrowing and ensure financial sustainability,” Adedeji noted.

At approximately 10.8 percent tax-to-GDP, Nigeria ranks as one of the lowest tax earners globally as all manner of tax rebates and evasion hold sway amid tight revenues.

While tax incomes went up by 56 percent in 2022 to a record of N10 trillion, former President Muhammadu Buhari left a record of N77 trillion debt.

The budget office disclosed earlier this month that the Federal Government deployed as much as 99 percent of its N4.06 trillion revenues to service debt within the first half of the year.

But Adedeji is optimistic that the trend would be reversed by leveraging data, innovation and technology amid stakeholders’ partnership.

“As we chart our course ahead, FIRS is committed to placing innovation, technology, and fresh ideas at the forefront of our operations. This strategic focus will empower us to enhance efficiency, fortify against revenue leaks, and bolster coordination and accountability within our organization.

“Our overarching goal is to nurture voluntary tax compliance by establishing a modern, dependable tax system that gamers the trust and admiration of all stakeholders. Through this, we hope to create an environment where taxpayers willingly fulfill their civic duties,” he stressed.

Adedeji who till his new appointment served briefly as Tinubu’s Special Adviser on Revenue, warned those deviating from their tax obligations, that FIRS will enforce its responsibilities judiciously.

“We will implement a robust enforcement model that effectively defers tax evaders while maintaining fairness and transparency in our processes.

“A fundamental aspect of our mission is to elucidate to taxpayers why their civic duty matters. We are committed to simplifying our tax system, making it accessible and comprehensible, thereby facilitating voluntary tax payments and fostering a sense of civic responsibility.

“Quality data will be the cornerstone of our operations, enabling us to measure our progress, make informed decisions, and maintain the highest standards of accountability. We recognise that data-driven strategies are essential to our success,” Adedeji added.

He also raised concerns of a pressing revenue crisis, with a staggering 96% of government revenue being funneled into servicing debts.

According to him, “This stark reality necessitates swift and resolute action on our part. We cannot afford to delay; we must act decisively to reverse this concerning trend.

“In our pursuit of a brighter fiscal future, we are determined to align ourselves with President Bola Tinubu’s esteemed Fiscal Policy and Tax Reforms Committee. This collaboration will enable us to shape a prosperous fiscal landscape that empowers our nation’s growth and development.”

He also pledged to maintain an open-door policy, actively engaging with stakeholders

To construct a formidable tax administration collaboratively and build an institution “that serves as a beacon of excellence.”

He further mentioned the principles of integrity, confidentiality, professionalism, and fairness as “non-negotiable” in the service to the nation.

“Upholding these values will guide our actions and interactions as we work tirelessly to fulfill our mission,” he pledged.

In his handover speech, Nami reeled out several of his four years achievements, including Administrative and Operational Restructuring, Automation of tax administration processes, creation of a customer-focused organisation as well as making the FIRS processes data-based.

He announced that the FIRS is currently contributing over 70% of all revenues the Federation Account Allocation Committee disbursed monthly.

Besides that, Nami also disclosed that the FIRS is on track to set yet another record in 2023 as it collected over N8.5trillion (cash) between January 1 and September 14, 2023 and has assessed, reconciled and recovered over N4 trillion outstanding tax liabilities and sequestered funds from NNPC on behalf of the Federation.

According to him, this total sum of over N12 trillion is exclusive of amounts invested by taxpayers under the Road Infrastructure Tax Credit Scheme and tax implications of waivers by the Government from January, 2023 to date.

Nami had during the inauguration of the erstwhile Board Members of the Service, promised to raise the country’s Tax-To-GDP ratio from 6% to 10% in four years.

He said the service has already achieved a Tax-to-GDP ratio of 10.86% within two years (i.e. as at 31st December 2021.)

The service had projected a minimum total 2023 tax collection of N15 trillion and a projected tax to GDP of nearly 14% by December 2023.

“Certainly, the projections by the current government of tax to GDP of 18% in another four years is not only realisable but can be surpassed,” he noted, while encouraging the new FIRS acting chair to continue with ongoing reforms and projects in the service for the benefit of the economy.