Nigeria's Economic Stabilisation Bills: A Comprehensive Analysis of the Proposed Changes

There are many things, you know, in the package. I don't know if one might say that it's a bit ambitious, that they want to change everything. Now, there seems to be a little bit for everybody. The people who don't earn as much are going to have their burden reduced. That seems to be the philosophy of thrust. And those who earn a bit more may have their burdens increased. So that seems to be the general direction. Whether the overall receipts will be greater than the previous, only time will tell. Yeah, it's quite a lot, like you mentioned, quite a lot, the government is trying to do quite a lot with this. But let's look at some aspects of these bills and their intended impact, especially around those 15 tax and fiscal establishment laws. In terms of impact and timeliness, how do you think the implementation could play out? Well, again, it depends on how quickly they move. This is where we're just about to enter October. Then you have November and the year has ended. Now, whether they can complete this this year, I don't know. Because in past years, there was only one finance act to look at. And you can remember how long it used to take to review that. Now you have several taxes to review. Whether it can all be done in a month or two, only time will tell. Because they can't just pass, they must have public hearings. The public will comment, the public will object, and then they must take all that on board, maybe make changes before they finalize. But the government seems to be optimistic that this policy would help to reduce inflation as well and also complement monetary policy measures here. But I'd like to get your thoughts on this as well. Oh, I see. Well, taxation and fiscal and monetary policy don't always work hand in hand. Let me give you an example. Right now, they say that those who produce, grow yams are not able to go to their farms. So let's say they are producing 1,000 yams a year, and the money available is a million naira. Tomorrow, if you have more money in your hands, maybe 2 million naira, but the number of yams is still 1,000. What's going to happen? It doesn't increase the number of yams, it simply increases the price per yam. So that's where I say collecting more tax money is not the same thing as growing the economy. We have to become more productive, whatever else we do. If we don't become more productive, putting more money in people's hands does not increase prosperity. Let's get to the area of VAT and also what the plan is doing in terms of small businesses there. And might I add as well, the part that the government is also seeking local currency collection for agencies like Mimasa and the NPA. Let me get your thoughts on the wider implications of this. Well, it's been an interesting issue all these years. On the one hand, you say you don't want to dollarize the economy. On the other hand, you are insisting that people who do business with those agencies should pay in foreign currency. There's something odd about that. And if they can do away with it, then we can move more and more towards having an economy that is as much as possible Naira-based. It was not always the case that those agencies were collecting dollars. There was a time when you couldn't hold dollars within Nigeria in the 70s. And so you couldn't pay dollars to an agency like that. Things changed and then agencies started collecting dollars. The area I'd also like to comment on is that, because we've talked about it so many times more or less, how to widen that tax net. And do you think the introduction of these tax identification initiatives here could help achieve that? Well, I believe so. But I then ask myself, you have a number of existing databases. So, for example, BVN. Many people have BVN and it has everything. It has my biometrics, my face, my fingerprint, etc., etc. You've got people's phone numbers. Again, everybody who has a phone has his biometrics in another database. Then you have the NIN. I mean, by the last count, I was hearing that almost 100 million people are on NIN. So why create a fourth or fifth database? If you simply use the existing databases, you can get your work done. So I'm trying to understand what the idea is. Because the data you want already exists. Just use it. So more or less harmonizing the rest of it then. Exactly. Thank you so much for your time. Definitely a lot to consider as we continue to look at the progress of these standardization bills in Parliament. Now, to your right there, Patnaik Alex joining me for that conversation.

Nigeria says the proposed changes to about 15 economic stabilisation bills will address inflation, complement monetary policy measures, and promote fiscal discipline among other issues. Theo Emuwa, Partner at Aelex, joins CNBC Africa for this discussion.

Pros and cons of Nigeria's economic stabilisation bills 

Nigeria says the proposed changes to about 15 economic stabilisation bills will address inflation, complement monetary policy measures, and promote fiscal discipline among other issues.

Pros and cons of Nigeria's economic stabilisation bills

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Pros and cons of Nigeria's economic stabilisation bills

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