As the new Economic Advisory Council (EAC) announced by President Muhammadu Buhari settles down for business, some stakeholders in the capital market have tasked the council to hit the ground running and reveres the proposed increase in value added tax(VAT).
The Council, which has Dr. Doyin Salami as chairman was announced on Monday. Its mandate is to advise Buhari on fiscal analysis, economic growth and a range of internal and global economic issues working with the relevant cabinet members and heads of monetary and fiscal agencies.
Other members are: Dr Mohammed Sagagi (Vice-Chairman); and Dr Mohammed Salisu (Secretary); Prof Ode Ojowu; Dr. Shehu Yahaya; Dr. Iyabo Masha; Prof. Chukwuma Soludo; and Mr. Bismark Rewane.
Reacting to the development, a stockbroker and Chief Executive Officer of Sofunix Investment and Communications Limited, Mr. Sola Oni said that on the composition of the council, one could heave a sigh of relief that every member of the team is a game changer.
“The team’s pre-occupation is to offer the federal government realistic measures to revive an ailing economy. The team should come up with appropriate policy framework to align fiscal and monetary policies, especially, where there are disconnects.
“The members should address the issue of domestic fund mobilisation through measures such as realistic interest rates on domestic savings, holistic integration of informal activities into formal sector and more efficient banking and insurance sectors,” he said.
He added that the council should also propose strategy for easy access to domestic credits by investors while provision of relevant incentives for domestic and foreign investors should be addressed.
“The members should conduct impact analysis on Economic Recovery and Growth Plan (ERGP) for enhanced implementation. They need to engage with the capital regulators and operators to identify measures to leverage the capital market to boost economic growth and development,” he added.
Oni stressed the need for the council to reverse the recent increase in Value Added Tax (VAT) without further delay, saying it would do more harm than good in the present circumstance.
“In advanced economies, people pay tax with ease because infrastructures are provided to aid economic and entrepreneurial activities. But it is a reverse logic in Nigeria where majority of private sector operators are struggling to survive and purchasing power of consumers is shrinking by the day. The whole situation makes tax issues appear punitive,” he said.
A former Deputy Governor of the Central Bank of Nigeria (CBN), Prof. Kingsley Moghalu, also hailed the new team.
“I commend President Buhari on his appointment of a new EAC to replace the EMT. In my book, ‘Build, Innovate and Grow (BIG), where I laid out a vision for Nigeria, this was exactly my recommendation. Glad it has been heeded.”
Also, a chartered accountant, tax expert and Managing Partner/CEO, Okwudili Ijezie &Co., Mr. Blakey Okwudili Ijezie had recently advised against the hiking of VAT to 7.5 per cent.
“My opinion is that the time is not ripe to effect this increase. I appeal to the federal government to drop this idea of increasing the VAT rate until the economy is in better shape,” Ijezie said.
Similarly, analysts at Afrinvest West Africa, said while they aligned with the age-long call to boost non-oil revenue, they believed the FG had chosen an easy but less impactful route with the proposed increment in VAT.