The Federal Government of Nigeria, through the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, has announced plans to introduce significant fiscal measures aimed at reducing inflation and encouraging job creation. These measures include granting outright tax breaks to companies that employ more staff and offering more import duty suspensions on certain goods.
During an exclusive interview on AIT’s Money Line, Mr. Edun revealed that these initiatives are part of the upcoming Inflation Reduction Act, which is expected to be signed by President Bola Tinubu in the coming weeks. The Act is designed to alleviate the rising costs of production for businesses, which have been impacted by the weak exchange rate and other economic policies.
Edun explained, “The Inflation Reduction Act will include a range of import duties, exemptions, lowering of tariffs, and outright tax breaks for employment. If you employ more people, you will be given a tax break against it. These fiscal incentives will be detailed in an executive order that the President will sign shortly.”
In addition to these measures, Edun highlighted the government’s ongoing efforts to ensure the availability and affordability of food. He mentioned that while the government is distributing grains from strategic reserves, they have also opened a window for food importation to drive down prices and ensure immediate availability. However, he assured that this would not undermine local farmers, as importation will only be allowed once all locally available produce has been utilized, with audits in place to verify compliance.
Addressing the issue of Nigeria’s high fuel import bill, Edun noted that the federal government spends around $600 million monthly on petrol imports. He attributed this to neighboring countries, including those in Central Africa, benefiting from Nigeria’s fuel imports.
Furthermore, Edun clarified that the federal government has not approached the Central Bank of Nigeria (CBN) for Ways and Means advances to fund government debts or salaries. Instead, they have utilized market instruments to manage their obligations. While the limit for such advances has been raised to 10 percent, Edun emphasized that this does not mean it will be used but serves as a safeguard to ensure payments can be made if there is a temporary gap between revenue and expenses.
These fiscal measures are part of the government’s broader strategy to reduce inflation, stabilize the exchange rate, lower interest rates, and create a more conducive environment for investment and job creation in Nigeria.
