Centre for Promotion of Private Enterprise (CPPE) has urged the federal government to focus on deepening revenue diversification, enhancing spending efficiency, and aligning fiscal outcomes with real economic performance, as reforms boost economic outcomes.
Muda Yusuf, Chief Executive Officer, (CPPE) made this call in a policy brief sent to BusinessDay.
According to Yusuf, the two major reforms: removal of fuel subsidy and the unification of exchange rates, have significantly boosted government revenues, expanded fiscal space, and improved the capacity for public investment.
He explained that with limited fiscal space, spending efficiency is paramount. He added that spending on infrastructure, productivity, food security and human capital development should be priority areas for government.
“Nigeria’s fiscal and tax reforms have delivered important progress in expanding revenue and improving fiscal sustainability. The next phase must focus on deepening revenue diversification, enhancing spending efficiency, and aligning fiscal outcomes with real economic performance.
“With prudent management, stakeholder collaboration, and social sensitivity, these reforms can lay a solid foundation for a more resilient, productive, and inclusive Nigerian economy,” Yusuf said.
Yusuf explained that collections from Value Added Tax (VAT) and Company Income Tax (CIT) have also increased, reflecting stronger compliance and a gradual recovery in economic activities, with subnational governments reporting higher revenues and increased allocations to agriculture, infrastructure, and social development.
He said, “Recent reforms have driven strong nominal revenue growth: fuel subsidy removal freed trillions of naira in fiscal resources, exchange rate unification boosted naira-denominated oil revenues. VAT and CIT collections improved through enhanced compliance and enforcement.
Read also: FG warns cooking gas distributors against hoarding, exploitative prices
“Despite these advances, the real fiscal impact is tempered by high inflation and exchange rate pressures. It is therefore important to assess fiscal outcomes in both nominal and real terms to maintain credible expectations and policy balance.”
He stressed the need to adjust fiscal assessments for inflation and exchange rate effects; communicate outcomes transparently, improve tax efficiency, expand the tax net, and optimize non-tax revenues and national assets.
Other recommendations include support for fiscal autonomy, accountability, and efficient resource use in states, implementation of tax reforms with flexibility, maintaining continuous dialogue with stakeholders and refine policies as needed.
