First City Monument Bank (FCMB) has opened a Flexx Hub at the University of Benin (UNIBEN) in Edo State. The Hub is a mini branch where basic banking transactions can be carried out, while also serving as an exclusive banking arena for FCMB’s customers who hold its youth account, known as Flexx. This is the…
From Amechi Ogbonna, Washington DC, USA
The International Monetary Fund (IMF) Wednesday, said Nigeria and other African countries need to establish strong institutions to facilitate the recovery of looted funds stashed away in developed economies.
Responding to a question on how multilateral institutions, including the IMF and the World Bank, can help Nigeria and other African countries retrieve the billions of dollars stolen by their former government functionaries, IMF’s Senior Economist, Catherine Patillo, who could not give a clear answer to what the institutions are doing to help the country recover its stolen funds assured that discussions on how to stem the menace was currently being handled by a global committee at a special forum holding in the near future.
Although she could not give further details on the constitution’s terms of reference for the global committee, Patillo stated that only such strong institutions can help Nigeria and other countries battling the menace of stolen fund to recover them.
“The types of strong fiscal institutions we have talked about are important for governments continuing to ensure that funds flow back to their countries,” she said.
Meanwhile, the Fund yesterday gave its tacit approval to the Federal Government’s Economic Recovery and Growth Programme, (ERGP), stressing it was capable of helping Nigeria exit recession.
This was as it also raised concern over the Buhari administration’s inability to control the disparity between the ratio of interest payment to domestic revenue mobilisation.
According to the IMF, the ratio of interest payment to tax revenue has doubled to 66 per cent in Nigeria, a development it noted would further constrain growth and delivery of reform objectives.
At a press briefing it hosted at the ongoing Spring Meetings of the IMF/World Bank in Washington DC, USA, IMF Senior Economist, Catherine Patillo, described Nigeria’s ERGP as a very welcome and well thought out policy that can help diversify the country’s economy and rescue it from its current economic recession.
“The Nigerian ERGP focuses on diversification and in addressing some of the deep-rooted problems related to strengthening structures, which are necessary for diversification and in building revenues, particularly oil revenue. So, we very much welcome the ERGP. As you are aware, since Nigeria went into recession last year, there have been forecasts about recovery, but it is still very fragile up to this year, hence the need to urgently address the fiscal situations of the country,” Patillo said.
According to her, “IMF’s recommendation would be for the continued fiscal consolidation. One striking statistics, I think, is the fact that over the past years, the ratio of interest payment to tax revenue has doubled to 66 per cent in Nigeria. So, two-thirds of all tax revenue is going into interest payment, showing the need to raise tax revenue. That would allow the government to implement the social and growth-friendly policies that are part of the objectives of the EGRP.”
She noted that low domestic revenue mobilisation and poor tax administration may, however, affect government’s effort to raise productivity and create more jobs in the country.
Also speaking, the IMF Director of Fiscal Department, Vitor Gaspar, commended effort of the Nigerian government’s fiscal policies and tax in particular.
“I had the privilege of visiting Nigeria some months ago and I was very happy to understand that for the authorities in Nigeria, fiscal policies in general and tax policy in particular are part of the strategy for development. That is precisely how I believe fiscal policy should be thought in developing countries as part of their development strategy.”