Analysts express divergent views on economic recovery plan

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Ifeanyi Onuba, Abuja

Financial analysts on Wednesday expressed divergent views on whether some of the fiscal strategies contained in the Economic Recovery and Growth Plan were adequate to reposition the economy and take the country out of recession.

The ERGP, which was released on Tuesday by the Federal Government, is targeting a real Gross Domestic Product of N81.38tn; increase in Value Added Tax rate on luxury items from five per cent to 15 per cent; single digit inflation rate of 9.9 per cent by 2020; and a free float of the naira in the foreign exchange market

The document stated that the recovery plan would enable the economy increase the level of fresh jobs from 1.5 million in 2017 to 5.1 million by 2020; increase the revenue from oil and non-oil sources from N4.94tn in 2017 to N6.12tn in 2020; and divest holdings in some government assets in the oil sector.

Speaking in separate telephone interviews with our correspondent on Wednesday, some of the analysts expressed optimism that the plan, if effectively implemented, would reposition the economy on the path of growth.

Others, however, faulted some of the parameters contained in the document, adding that the specific strategies to achieve the target were lacking.

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Those who spoke on the issue were the President, Abuja Chamber of Commerce and Industry, Mr. Tony Ejinkeonye; a development economist, Odilim Enwangbara; and a former House of Representatives member, Dr. Anthony Aziegbemi.

Ejinkeonye said while the document contained enough strategies to stimulate economic activities, there was a need for the government to check its agencies from coming up with policies that might be inimical to the objectives of the plan.

He said, “We are part of the preparation process and so we are highly optimistic of the government’s political will to implement the plan.

“But with this directive that the Customs are giving on checking of Customs papers for old vehicles, it now rings a false tune for us in business, because in our several meetings with the government, we made them to understand that every government decision and policy has to be coordinated, most especially from the Ministry of Budget and National Planning.

“One ministry or agency cannot just take a decision on something without integrating it with the Economic Recovery and Growth Plan. This is the kind of thing that discourages investment and business in Nigeria.”

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In his comment, Enwangbara supported the government’s plan to float the naira and increase the tax on luxurious items, but faulted the decision to divest government’s holding in some oil assets.

He said, “We need to move our VAT to where other countries have their VAT rates. Our VAT rate is the lowest in the world. Why shouldn’t we think 30 per cent for luxury goods if not 50 per cent? Luxury goods are supposed to attract 50 per cent, while normal goods are supposed to attract between 10 per cent and 20 per cent.”

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