The Federal Government has announced that it was fine-tuning arrangements to embark on a 30-year economic long-term development plan.
Mrs. Zainab Ahmed, Minister of Finance, Budget and National Planning, stated this in Abuja on Monday at the media briefing in preparation for the 25th Nigerian Economic Summit (NES#25).
Ahmed said both Vision 20:2020 and the present administration’s Economic Recovery and Growth Plan (ERGP2016-2020) would expire next year, adding that there was the need for Nigeria to have a long term economic development plan to guide her activities.
Fielding questions from journalists, Ahmed explained that a vision document would help to plan where the country wants to be in the next couple of years.
“So, the vision document for us in the Planning Ministry is expiring by 2020, and also the ERGP. So, immediately after this, we will be taking inputs from the summit and we will be starting another development plan which may be 30-year plan.
“The plan may be 2021-2050 or 2021-2040. We hope that there will be a group drawn from the public, private, states, local government areas, development partners to develop it.”
She posited that a lot of things had been achieved following the implementation of Vision 20:2020 and the ERGP, adding that the four-year ERGP document was drawn from Vision 20:2020.
She noted that one of the pillars of ERGP was achieving food security and self-sufficiency in rice production by 2018, adding that Nigeria had already achieved self-sufficiency in rice production.
“I am happy to say that this has been achieved. Nigeria has achieved self-sufficiency in rice, but also the milling capacity, to the extent that we do not need imported rice into this country,” she asserted.
Commenting on the recent planned increase of VAT from 5 percent to 7.5 percent, the minister said the Federal Government took the decision in a bid to raise revenue for the implementation of the minimum wage.
She said only 15 percent of the funds generated through VAT would be allocated to the Federal Government, and that 85 percent of the proceeds of VAT would be allocated to states and local government areas.
“This increase is one of the recommendations of the committee. It is going to be implemented as part of the conditions for the implementation of minimum wage. We are going to do consultations with the National Assembly.
“Let me use this opportunity to say that VAT is a consumption tax. It is not applicable on food, transport, even education.
“If you decide to go to market to buy food, you are not paying VAT, but if you decide to go to a restaurant to eat, the restaurant has added value by taking the food and presenting it in a way you’d like, so you are going to pay VAT. So VAT is a consumption tax,” she said.
Speaking on the theme of this year’s NES#25 entitled, ‘Nigeria 2050: Shifting Gears’, she underscored the need for Nigeria to move to a more robust competitive private sector-led economy while discussing the implication of the projected population of the country hitting over 400 million by 2050 with 65 percent of the population under the age of 35.
According to her, “It is only a competitive private sector-led economy that will drive this process and ensure economic prosperity for all Nigerians.
“Let me say that to ensure a competitive economy, we must have stable macroeconomic conditions and business climate that will keep transaction costs low, thereby encouraging savings, investment, and job creation.
“Nigeria’s economic prosperity depends on the productivity of our human and natural resources.”
Meanwhile, Minister of State for Budget and National Planning, Mr. Clem Agba, said the Federal Government would maintain its benchmark of $60 per barrel in spite of the sudden increase in price of crude oil.
Agba said this while fielding questions from journalists at the media briefing for the 25th Nigerian Economic Summit in Abuja on Monday.
Oil prices rose as much as 20 percent to above $71 per barrel, the biggest percentage spike in almost three decade as markets reopened after an attack on Saudi Arabia’s oil infrastructure that cut more than half of the country’s production.
The minister said government would be monitoring the situation to decide the next line of action.
He said if the current rise in price of crude oil is sustained then there might be need for adjustment otherwise government had no such plan.
“Considering the recent event in Saudi Arabia, leading to soaring oil price, we will still maintain our benchmark rate in the 2020 budget proposal,” he said.
The reported strike by 10 drones at Saudi Aramco’s Abqaiq and Khurais oil facilities have disrupted more than half of Saudi Arabia’s oil capacity or 5.7 million barrels per day (mbpd).
The U.S has blamed Iran for the attacks even as Yemen’s Houthi rebels claimed credit. Some oil traders have already begun to speculate if oil prices will cross the $100 mark yet again.