FG Working on Excessive Liquidity In The System

The Federal Government will identify ways and means to address the issue of excessive liquidity in the system, according to remarks made yesterday by Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy.

In response to queries from the media yesterday during an investor meeting at the ongoing Spring Meetings of the IMF and World Bank in Washington, DC, he stated that the monetary and fiscal authorities were working in tandem to reduce inflation.

According to him, “We will pin down Ways and Means to alleviate the pressure of the excess money in the system.

“By so doing the two authorities are working hand in hand to bring down inflation and pressure on price stability and stabilising the exchange rate, with the target of bringing down interest rate so that investors can borrow at a more affordable rate and getting the economy going in the right direction again.

“We need to borrow less and focus more on domestic resource mobilisation. We want long-term resources to avoid repayment and refinancing pressures.”

The Minister went on to say that because the country’s GDP to tax ratio was unacceptably low—even lower than the norm for the African region—reforms were in place to increase tax income in the next three years by doubling tax revenue streams and streamlining taxation.

“At 10 per cent to GDP, what should I say, it would appear as if some people are not paying their taxes.

“Our analysis has shown that 90 per cent of tax revenue comes from nine tax heads while we have over 80 taxes from federal, through states to local councils.

“Mr. President, even if we eliminate the large number of these taxes and concentrate on the nine that yield the current 90 per cent revenue and deploy technology, there will be more efficiency and we will be able to double our tax revenue in about three years.

“If we eliminate the large number of taxes and bill people properly we will gain in terms of the peoples’ willingness to pay and you will collect more revenue.”

In response to a query about food security, the minister stated that the administration was addressing the issue of giving farmers access to their farms, particularly in regions of the nation where food production has been significantly impacted by insecurity.

“What the security says now is that the insecurity now is more of economic than doctrinal reasons”.

In an effort to boost the nation’s food production, Mr. Edun stated that agro clusters were being created in association with the African Development Bank.