The
International Monetary Fund (IMF) Wednesday, said Nigeria and other African
countries need to establish strong institutions to facilitate the recovery of
looted funds
stashed away in developed economies.
Responding to
a question on how multilateral institutions, including the IMF and the World
Bank, can help Nigeria and other African countries retrieve the billions of
dollars stolen by their former government functionaries, IMF’s Senior Economist, Catherine Patillo, who
could not give a clear answer to what the institutions are doing to help the
country recover its stolen funds assured that discussions on how to stem the
menace was currently being handled by a global committee at a special forum
holding in the near future.
Although she
could not give further details on the constitution’s terms of reference for the
global committee, Patillo stated that only such strong institutions can help
Nigeria and other countries battling the menace of stolen fund to recover them.
“The types of
strong fiscal institutions we have talked about are important for governments
continuing to ensure that funds flow back to their countries,” she said.
Meanwhile, the
Fund yesterday gave its tacit approval to the Federal Government’s Economic
Recovery and Growth Programme, (ERGP), stressing it was capable of helping
Nigeria exit recession.
This was as it
also raised concern over the Buhari administration’s inability to control the
disparity between the ratio of interest payment to domestic revenue
mobilisation.
According to
the IMF, the ratio of interest payment
to tax revenue has doubled to 66 per cent in Nigeria, a development it noted
would further constrain growth and delivery of reform objectives.
At a press
briefing it hosted at the ongoing Spring Meetings of the IMF/World Bank in
Washington DC, USA, IMF Senior Economist, Catherine Patillo, described
Nigeria’s ERGP as a very welcome and well thought out policy that can help
diversify the country’s economy and rescue it from its current economic
recession.
“The Nigerian
ERGP focuses on diversification and in addressing some of the deep-rooted
problems related to strengthening structures, which are necessary for
diversification and in building revenues, particularly oil revenue. So, we very
much welcome the ERGP. As you are aware, since Nigeria went into recession last
year, there have been forecasts about recovery, but it is still very fragile up
to this year, hence the need to urgently address the fiscal situations of the
country,” Patillo said.
According to
her, “IMF’s recommendation would be for the continued fiscal consolidation. One
striking statistics, I think, is the fact that over the past years, the ratio
of interest payment to tax revenue has doubled to 66 per cent in Nigeria. So,
two-thirds of all tax revenue is going into interest payment, showing the need
to raise tax revenue. That would allow the government to implement the social
and growth-friendly policies that are part of the objectives of the EGRP.”
She noted that
low domestic revenue mobilisation and poor tax administration may, however, affect government’s effort to raise
productivity and create more jobs in the country.
Also speaking,
the IMF Director of Fiscal Department, Vitor Gaspar, commended effort of the
Nigerian government’s fiscal policies and tax in particular.
“I had the privilege
of visiting Nigeria some months ago and I was very happy to understand that for
the authorities in Nigeria, fiscal policies in general and tax policy in
particular are part of the strategy for development. That is precisely how I
believe fiscal policy should be thought in developing countries as part of
their development strategy.”
Sun News
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