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ECONOMIC REFORM SYSTEM AND THE POPULACE

KINGSLEY NDUBUEZE AYOZIE argues that the economic reform points to commitment to transparency and prosperity for the teeming populace
Records have it that no meaningful advancement or development can be recorded within any
developing or revitalising economy without such a government putting in place a holistic reform structure that will be able to bring it back to fore. The list of these sectors will cut across the following sectors: banking system, down stream sector, power sector, security apparatus, governance system,
political landscape, information & communications technology (ICT), educational sector and tax system,
etc.
This article is poised towards x-raying in detail the effect of the Federal government’s
numerous economic reforms will have on the general populace or the citizenry.
The Federal Government through the Central Bank of Nigeria (CBN) of recent embarked on
series of reforms that are targeted at guaranteeing a unification in the foreign exchange market between the bank rate and the rate obtained at the parallel market; and the restoration of credibility to monetary policy which is further attributable to the CBN’s actions.
Within the down stream sector (oil & gas), the FGN upon assumption of office on May 29th 2023 embarked on the issue of fuel subsidy removal, in addition to the deregulation of the down sector which
saw Dangote refinery coming on board a few months ago to engage in the local production and refining of crude. This measure is coming barely 28 years that NNPC was able to refine crude oil locally here last in Nigeria. This deregulation measure according to the Federal Government is meant to address the
issue of persistent scarcity of PMS that the country was plunged into over the years; curb the issue of
landing costs associated with re-importing back into the country the earlier exported crude. Further more it will boost local supply of PMS across the nooks and crannies of the Nigeria, ease out
frequent scarcity, and reduce the high demand in scouting for foreign
exchange (forex). Additionally, it will put to an end the issue of round tripping (taking dollar out and not
bringing in product in exchange).
However at the short run, the removal of fuel subsidy has brought about more pains and untold hardship than the possible gains on the masses and the teeming populace in general. As we are all aware that
transport costs has tripled from what it used to be prior to the removal. Take for instance, the
bus fare that costs #50 from Coker bridge to Adetola in Aguda Surulere axis of Lagos before the removal
of the fuel subsidy now costs #200 for the same distance after the removal.
Incidentally the sky-rocketed transport fares has suddenly impacted negatively on the prices of food
items and household commodities as some items have witnessed over 300% to 400% hike in price from
what it used to be before the removal. Take for example, a sizeable tuber of yam that was priced at
#1,500per tuber is now soaring within #5,000 to #6,000 for the same tuber size. Similarly, a bottle of fried groundnut that was initially priced at #800 per bottle is now being sold for #3,000 per bottle.
On the issue of tax reform which is meant to address a comprehensive restructuring of the policies, laws, and administrative procedures guiding how taxes are assessed, collected, and managed by the
government. This measure is not merely about increasing government revenue; it is about making the tax system fairer, simpler, and more aligned with modern economic realities. If properly adopted, the
reform in our tax jurisdiction will yield some potential benefit such as: Repeal outdated tax laws and
enact modern, business-friendly alternatives,
Consolidate multiple taxes into fewer, streamlined taxes ; harmonise tax collection processes across federal, state, and local government levels; modernise tax administration to meet global standards cum
expectations; it will further expand the tax base without necessarily increasing the tax burden; guarantee a predictable and favourable fiscal environment for investors to take hold of and encourage voluntary compliance and reduce opportunities for evasion or forms of tax fraud that has
ravaged our system. More importantly, it will enhance Nigeria’s attractiveness as a business destination
for potential investors especially in the area of foreign direct investment (FDI) . Interesting, a nation’s economic strength lies in its ability to support and grow its business ecosystem. The business environment’s reform will among other things address issues associated and connected with all the
systems, norms, infrastructure, and regulations influencing business operations. Furthermore, its
reform will focus more specifically on how easy it is for a business to start, operate, and expand within a given geographical boundary.
At the home front, an ideal business environment reform must focus essentially on six important angles, collectively known in the school of management as the PESTLE index:
Political: A stable government that supports enterprise and small & medium scale enterprises (SMEs).
Economic: Predictable inflation, interest, and exchange rates within the economy; Sociocultural: Values, norms and ideologies that support entrepreneurship and small & medium scale enterprises (SMEs) within the economy.
Technological: Innovation-friendly policies that support large scale production; Legal: Fair and enforceable tax and business laws that promote industrialisation; Ecological: Commitment to sustainable environmental practices.
Benefits of Economic Reform system: A well implemented economic reform system will attract loads of benefits which include but not
limited to: Facilitate Job creation cum employment generation; Support a simplified business regulation cum legislation; Guarantee an improved governance and accountability model;
• Promote an increased domestic and foreign direct investment (FDI) into the economy.
Furthermore, these reforms if properly harnessed will bring about the following: an enhance fiscal transparency; promote prudent financial management; foster inclusive growth; stabilise macro-economic environment; improve debt sustainability; enhance the nation’s access to international
capital markets; reduce borrowing costs; Fast-track economic revitalisation; create jobs and above all reduce unemployment to the barest minimum.
A nation’s economic strength lies in its ability to support and grow its business ecosystem.
This holistic economic reform structure pinpoints our total commitment to transparency, financial
discipline and prosperity for teeming populace.
It is therefore essential that we all key into ongoing reform initiatives. The gains, in terms of economic growth, employment generation, job creation, and national development, far outweigh any temporary
discomfort or pain it may require especially at the long run.
Dr Ayozie FCTI, FCA, writes
from Lagos