Fiscal and Tax Policy Reforms:
Mr. Edun has spearheaded broad-ranging reforms of fiscal and tax policies aimed at enhancing fiscal governance, transforming revenue, and stimulating economic growth. The new national fiscal policy is in its final stages, focusing on streamlining taxes, improving collection and compliance efficiency, and promoting an effective incentive framework. The Presidential Fiscal Policy and Tax Reforms Committee (PFPTRC) is currently engaged in tax harmonization and streamlining tax collection processes, with strategies for broadening the tax base and advancing a single-digit tax system to reduce the number of taxes in the country.
Expenditure Control:
Under Mr. Edun’s leadership, the Ministry of Finance has reengineered the government expenditure process to achieve full visibility of transactions. In the 2024 capital budget, payments will be made directly to contractors, suppliers, and other service providers. The Federal Government has also enhanced the Import Duty Exemption Certificate (IDEC) platform to include monitoring and evaluation.
Revenue Increase:
Revenue has significantly increased, with oil production reaching 1.69 mbpd in March 2024 due to improved security. The Federal Government of Nigeria’s (FGN) retained revenue from ministries, departments, and agencies (MDAs), as well as federal government-owned enterprises, rose substantially in Q1 2024, amounting to N2.85 trillion compared to Q1 2023. This growth is attributed to increased tax and customs revenues and the employment of technology-driven systems to automatically deduct revenue owed to the FGN. Notably, the FGN has also begun earning foreign exchange (FX) income under the new revenue model.
Reduction of Ways and Means Exposure:
The FGN, through the Debt Management Office (DMO), raised N4.8 trillion from domestic capital markets to repay outstanding obligations to the Central Bank. An additional N2.5 trillion was paid from the proceeds of further issuance of government securities. To date, the Tinubu administration has repaid N7.3 trillion in Ways and Means debt.
Debt Service Without Recourse to Ways and Means:
Mr. Edun highlighted that, due to improved fiscal discipline, the government has largely financed debt service obligations, including foreign debt service, without resorting to the Ways and Means Account. This includes outstanding commitments and shareholding to multilateral development banks (MDBs) and international organizations, including over US$200 million to the Islamic Development Bank.
Support of Monetary Policy:
The issuance of government debt securities by the DMO at higher interest rates has provided a better risk-adjusted return to investors, thus supporting monetary policy authorities in attracting foreign portfolio investments (FPIs) and stabilizing the exchange rate of the naira. There has been active coordination between fiscal and monetary authorities to ensure the effective transmission of monetary and fiscal policies in line with the economic vision of the President.
National Single Window (NSW):
Mr. Edun announced the launch of the National Single Window, a technology platform for trade facilitation and import administration, which has the potential for an annual economic benefit of US$2.7 billion. The NSW will revolutionize port operations, making them more cost-effective and enhancing competitiveness.
Financing Major Infrastructure Projects:
The recent unveiling of the “Renewed Hope Infrastructure Development Fund” is a bold step toward improving investments in coastal roads, bridges, rail, and airports as enablers for agriculture, solid minerals, and energy. According to the Minister, the RHIFD will have an initial take-off fund of N20 trillion and is expected to be a game-changing fund that galvanizes socio-economic activities in the country.
Infrastructure and Housing Finance Fund:
The Ministry of Finance Incorporated (MOFI) is partnering with government agencies and the private sector to boost investment and provide 25-year low-interest mortgages. An estimated N20 trillion is anticipated to be mobilized from institutional investors for the infrastructure and housing sectors.
Foreign Direct Investments:
Under Mr. Edun’s leadership, the Ministry of Finance has actively engaged with a broad range of international investors from the Middle East, Europe, and India to showcase the reformed economic policies of the FGN. Advanced discussions with investors from the Middle East are expected to result in significant investments in the near term, with the oil and gas sector alone projected to attract $7 billion in foreign investments.
Protecting the Poor and Vulnerable:
The Ministry of Finance has played a critical role in strengthening the social protection system by reforming the administration of the direct benefit transfer program. Transfers of up to N75,000 to approximately 15 million households are ongoing, utilizing unique identifiers to improve transparency and reduce fraud. Approximately 3.2 million beneficiaries have already received funding.
Intervention Funding:
Following critical reforms such as the removal of the dysfunctional fuel subsidy and the elimination of multiple foreign exchange windows, Mr. Edun highlighted additional interventions by the Federal Government to ease the impact on vulnerable households and SMEs, including:
- N500 billion in multi-sector interventions
- N100 billion funding for the procurement of CNG-fueled buses and supporting infrastructure
- N200 billion for food production
- N200 billion for SMEs and manufacturing sector funds
- N50 billion Presidential Conditional Grant Scheme for eligible nano business owners
- N75 billion FGN Micro, Small and Medium Enterprises (MSME) scheme to support small businesses
- N75 billion intervention for the manufacturing sector to support eligible Nigerian production firms
Increased Revenue Generation:
According to Mr. Edun, FGN revenues from government-owned enterprises (GOEs) substantially increased in Q1 2024, reaching 835.7 billion compared to 154.3 billion in Q1 2023. This impressive revenue record was facilitated by the introduction of technology-driven systems to automatically deduct revenue due to the FGN. The Nigeria Customs Service recorded unprecedented increases, with an 87% rise in 2023 revenue mobilization and a 122% revenue increase in Q1 2024 compared to Q1 2023. The Federal Inland Revenue also achieved a 107% accomplishment of the 2023 target and a 56% revenue improvement in Q1 2024 compared to Q1 2023.
Fiscal Policies & Financial Management:
The administration launched the Incentives Monitoring & Evaluation Platform (IMEP) to prevent the misuse of tax incentives by restricting access to those who do not qualify. The Ministry strengthened the implementation of fiscal policies surrounding the Import Duty Tax Incentive to boost key economic sectors and promote sustainable socio-economic impacts.
The DMO has raised N4.8 trillion from domestic capital markets to repay outstanding obligations to the Central Bank of Nigeria, working toward bringing the Ways and Means balance within legal limits. It is also progressing toward final approval stages for a $2.25 billion single-digit interest loan from the World Bank, featuring a 40-year term with a 10-year moratorium at a 1% interest rate.
Oil Revenue:
In just one year, the Tinubu Administration boosted oil revenues through increased oil production of 1.65 mbpd as of January 2024. The Minister reported oil revenue of N1.1 trillion in the first quarter of 2024, compared to N460 billion in the same period the previous year (2023).
Increased Revenue Collection:
The Office of the Accountant General of the Federation reported a collection of revenues from federally owned enterprises that increased from N2.85 trillion, facilitated by the automation of the deduction process. Key initiatives included mobilizing loan financing, catalyzing capital inflow, and enhancing efficiency through digitalization, which streamlined trade processes and reduced bureaucratic bottlenecks. This resulted in an average clearance time for goods reducing by 300%.
Improved Lives and Livelihoods:
The Federal Housing Authority (FHA) financed over 9,150 affordable homes across the six geopolitical regions. Following the success of three pilot healthcare facilities, the Nigeria Sovereign Investment Authority (NSIA) is developing and operationalizing 23 new modern medical diagnostic centers, 2 oncology centers, and 7 catheterization laboratories. Construction has commenced on 10 of these facilities, expected to be operational by 2025. Additionally, the National Insurance Commission (NAICOM) has optimized and deepened the effectiveness of the Nigerian insurance sector, surpassing Q1 2024 targets for the number of Nigerians covered and gross premium generated. The Pension Transitional Arrangement Directorate (PTAD) has enrolled 3,208 legitimate pensioners who were previously removed or never added to the database, improving their economic livelihoods and welfare.
Driving Public Education and Awareness:
The Nigeria Deposit Insurance Corporation (NDIC) has pursued various public education initiatives aimed at enhancing financial literacy to promote financial inclusion. The DMO has commenced the publication of the quarterly debt bulletin in Q2 2023 in compliance with the World Bank’s performance and policy actions for 2024. Furthermore, the Nigerian Export-Import Bank (NEXIM) has launched the Nigerian Export Academy (NNEXA), a digital learning platform designed to promote capacity building among exporters and raise awareness of export procedures, documentation, and related issues.
Other Reform Implementations and Initiatives:
MOFI has played a leading role in implementing the Presidential Compressed Natural Gas Initiative (PCNG), which includes developing appropriate standards, securing tax and duty waivers, launching pilot conversion centers across each geopolitical zone, and ordering over 44,000 key assets (e.g., CNG vehicles, tricycles, conversion kits) expected to be received within the next month. MOFI is also developing a real estate investment fund awaiting presidential approval, with an implementation program starting with a pilot of 25,000 units as proof of concept for the proposed intervention.
Mr. Edun gained international experience while on secondment to the Wall Street firms of Lehman Brothers and Chase Manhattan Capital Markets in New York, USA. He is a Fellow of the Chartered Institute of Stockbrokers.
