Wale Edun’s Economic Reforms: A Blueprint for Alleviating Nigerian Sufferings

By Zide Peters

Olawale Edun, Nigeria’s Minister of Finance and Minister of Economic Integration, has taken on the mammoth challenge of reviving the country’s economy amid global uncertainties. His unwavering commitment to reform is evident as he lays the groundwork for transformative changes. Edun stresses the need for wide-ranging reforms in fiscal and tax policies to fulfill campaign promises of a renewed trust administration. These reforms are necessary to improve fiscal management, generate income diversification and promote economic growth. Appointed by President Bola Tinubu, Edun’s extensive experience in economics and finance will be instrumental in guiding Nigeria towards a prosperous future.

Between 1999 and 2007, when Tinubu was governor of Lagos, Edun served as Commissioner for Finance, with a background in economics, international finance, commercial banking and corporate finance at the national and international levels, as the new Minister of Finance. and Coordinating Minister for Economy.

He also started working with the World Bank/IFC in Washington, DC under the Distinguished Young Professionals Program. He worked on economic and financial projects at the World Bank for several countries in the Far East, Latin America and the Caribbean.

Edun has been Chairman of Chapel Hill Denham Group since March 2008. On his return to Nigeria in 1989, he co-founded and held the position of Managing Director of Stanbic IBTC Plc (formerly Investment Banking & Trust Company Limited). He founded Denham Management Limited in 1994, which later merged with Chapel Hill Advisory Partners to become Chapel Hill Denham Group, a leading independent investment banking firm. At the time of incorporation in 2008, the company had shareholder funds of over N9bn ($12m).

While serving as the Finance Commissioner in Lagos, he was instrumental in the significant increase in the revenue of the state.

Four things helped to achieve this feat:

-Commitment to technology has helped increase returns and prevent loopholes; total computerization of government functions; reliance on the private sector and private investment to drive the economy; and efficient use of financial markets.

-Wale Edun was instrumental in designing and implementing innovative, indigenous-development technology-based solutions that increased the available resources of the government, generated large amounts of revenue, and thereby provided the government with what it needed to spend on infrastructure and social services. , and job creation.”

-With all these in mind, he took on the responsibility of sustaining the unprecedented economic growth and stability that the nation saw as the Minister of Finance and Minister of Economic Co-ordination.

– He has spearheaded transformative policies that have strengthened our financial systems, promoted sustainable growth, redesigned the government spending process to achieve full transparency of transactions, and fostered a resilient economy.

Today’s key achievements of the Minister of Finance and Economic Integration, Mr. Wale Edun:

Fiscal and Tax Policy Reforms:

A wide-ranging reform of fiscal and tax policies has led to improved fiscal governance, revenue transformation and economic growth.

The new National Fiscal Policy, which is in its final stages, focuses on streamlining taxes, increasing collection and compliance efficiency, and developing an efficient incentive structure.

Cost Control:

Redesigned the government expenditure process to achieve full visibility of transactions.

-Under the 2024 capital budget, payments will be made directly to contractors, suppliers and other service providers.

-FGN has also developed an Import Duty Exemption Certificate (IDEC) platform that includes monitoring and evaluation.

Revenue Increase:

Increased revenue with oil production reaching 1.69 mbpd in March 2024 due to improved safety.

-Federal Government of Nigeria (FGN) retained revenue from Ministries, Departments and Agencies (MDAs) and federally owned enterprises (N2.85 trillion in Q1 2024 and N2.85 trillion in Q1 2023).

-Used technical support systems to automatically deduct revenue through FG due to increased tax and customs revenues and improved assurance.

– in a historical development. FGN also generates FX income under the new revenue model.

Minimizing routes and means of exposure:

The FGN, through the Debt Management Office (DDMO), repaid N4.8 trillion in outstanding liabilities to the central bank from the domestic capital markets.

An additional N2.5 trillion is to be repaid from the proceeds of further issuance of government bonds, bringing the outstanding amount to N2 trillion.

Loan Service Without Using Ways and Means:

As part of its commitment to improved fiscal discipline, the government has funded debt service obligations through available cash reserves, rather than relying on the Ways and Means account.

The Ministry of Finance has funded external debt services as other obligations of the FGN, without resorting to credit channels and mechanisms.

Support of monetary policy:

The Ministry of Finance has supported monetary policy authorities in attracting FPIs and stabilizing the naira’s exchange rate by offering DMO government bonds at higher interest rates that offer better risk-adjusted returns to investors.

-Active coordination between fiscal and monetary authorities to ensure effective dissemination of monetary and fiscal policies in line with the President’s economic vision.

National Single Window (NSW):

-Launch of NSW by Mr President. NSW is an e-community platform for trade facilitation and import management. Once fully implemented, it is expected to generate an economic benefit of around US$2.7 billion annually.

Financing the initiation of major infrastructure projects:

The Ministry of Finance has provided critical initial funding from internal funds to initiate major infrastructure projects such as the Lagos-Calabar Coastal Road.

Infrastructure and Housing Finance Funding:

MOFI has partnered with government agencies and the private sector to leverage investment and provide low-interest mortgages for 25 years.

An estimated N2.00 trillion is expected to be raised from institutional investors for the infrastructure and housing sectors.

Foreign Direct Investments:

MOF, under the leadership of Mr. President, has actively engaged with a wide range of international investors from the Middle East, Europe and India to showcase FGN’s reformed economic policies.

Well-advanced discussions with investors in the Middle East are expected to result in solid investments in the near future.

Protection of the poor and vulnerable:

MOF has played a key role in strengthening the social security system by redesigning the process and administration of the Direct Benefit Transfer Scheme.

-Up to N75,000 is transferred to approximately 15 million households using unique identifiers to improve transparency and curb fraud.

About 3.2 million beneficiaries have already been funded.

Intervention Fund:

-MOF funded critical special intervention projects to the tune of N500 billion.

-N100 billion funding for purchase of CNG fueled buses and infrastructure development.

N200 billion for food production.

N200 billion for SMEs for manufacturing and nano subsidy for small businesses.

Revenue Increase:

Nigeria’s customs service revenue is projected to grow by 86.68 percent to N3.2 trillion in 2023 over the previous year. In Q1 2024, the service collected N1.30 trillion, a significant increase of 122.35 percent compared to Q1 2023.

The Federal Inland Revenue Service (FIRS) achieved 107.00 percent of its 2023 revenue target by collecting N12.36 trillion, and Q1 2024 revenue of N3.94 trillion, 56 percent higher than the same period last year.

Revenue Increase:

The Office of the Accountant General’s revenue collection of federally owned enterprises increased from N2.85 trillion through the automation of the deduction process:

– Debt Fundraising.

– Catalyst capital inflows.

Greater efficiency and effectiveness through digitization, which streamlined trade processes and reduced bureaucratic bottlenecks through efficient clearance procedures and use of advanced technology, resulting in a 300:00 percent reduction in average clearance time for goods.

Improved Living and Livelihoods:

FHA’s financing of more than 9,150 affordable housing units in six geopolitical regions.

Following the success of its three pilot healthcare facilities, NSIA is building and operating 23 new state-of-the-art medical diagnostic centers, 2 oncology centers and 7 catheterization laboratories. Construction of 10 facilities has begun and will be operational by 2025.

-NAICOM’s upgrade and deepening of the performance of the Nigerian insurance industry will surpass Q1 2024 targets for number of Nigerians and gross premium.

-PTAD has identified 3,208 legitimate pensioners who were wrongly removed from the database or not yet included, improving their economic livelihood and welfare.

Conducting public education and awareness:

-NDIC has pursued various public education initiatives aimed at promoting financial literacy to promote financial inclusion.

The DMO has started publishing the 2023 quarterly credit report in line with the World Bank’s performance and policy measures for 2024.

-Nexim has launched the Nigerian Export Academy (NNEXA), a digital learning platform to promote skills development among exporters and create awareness on export procedures, documentation and other related issues.

Other Reform Practices and Initiatives:

MOFI played a key role in implementing the President’s Compressed Natural Gas Initiative (PCNG), promoting appropriate standards, securing tax and tax exemptions, launching pilot conversion centers in each geopolitical zone and transferring more than 44,000 key assets (ie, CNG vehicles, tricycles, conversion kits, etc.) to the next generation. Expected to be available within the month.

MOFI created real estate investment fund awaiting presidential approval. As a proof of concept for delivering the proposed intervention, an implementation plan will be developed starting with a pilot of 25,000 units.

MOFI set up a Special Purpose Vehicle (SPV) to manage the day-to-day operation of the President’s initiative.

Meanwhile, the Office of the Attorney General of the Federation (OAGF) is monitoring the implementation of public financial management reforms.

Wale Edun’s tenure as Minister of Finance and Minister of Economic Integration has the potential to fundamentally change the economic landscape of Nigeria. However, achieving this vision requires an unwavering commitment to implement comprehensive fiscal and tax reforms, foster transparency and ensure equitable distribution of resources.

By addressing these critical areas, Edun can drive sustainable economic growth, increase public confidence in governance and improve the quality of life of millions of Nigerians.

The road ahead is challenging, but with strong leadership and a commitment to accountability, Nigeria can look forward to a bright, prosperous future. The success of these reforms will not only alleviate immediate suffering but also lay a solid foundation for long-term stability and growth.

Jade is a general practitioner.