FG to boost economy with single-digit rates, tax incentives -Edun

The Federal Government of Nigeria has unveiled key initiatives aimed at driving economic growth by reducing corporate taxes, offering single-digit interest rates, and funding local manufacturing.

Wale Edun, minister of finance and coordinating minister of the economy, disclosed this on Thursday at Access Bank’s 2024 ‘Corporate Customer Forum; held in Lagos.

He emphasised that the government is committed to creating an enabling environment for the private sector through long-term low-interest 25 years mortgages and support for manufacturing.

Edun explained that consumer credit schemes will facilitate the purchase of durable goods, thereby stimulating the manufacturing sector. He also outlined plans to reduce corporate income tax, aiming to free up capital for businesses and encourage investment.

According to him, the government will shift the tax burden to high-end consumption, increasing taxes on luxury goods while exempting essential items like food and pharmaceuticals from VAT. This, according to Edun, will drive local production, create jobs, and stimulate demand across key sectors such as agriculture, health, power, and oil and gas.

Aliko Dangote, Africa’s richest man and Nigeria’s leading industrialist, praised the government’s efforts but stressed the need for stronger domestic investments.

“No domestic investment, no foreign investment,”  Dangote said, pointing out that local industries must be supported to create jobs at home and reduce reliance on imports.

He expressed concern about Nigeria’s current dependence on foreign goods, citing an example of biscuits being imported from China, which he described as “creating jobs in China and poverty here.”

Dangote further emphasised the importance of protecting local industries, particularly small and medium-scale enterprises (SMEs), from unfair competition with foreign manufacturers who benefit from subsidised loans. He urged the government to continue its work in creating a “circular economy” where all sectors, from manufacturers to bankers, can benefit and ensure that local industries thrive.

In addition, Edun acknowledged the role of SMEs in Nigeria’s economy, highlighting government interventions such as N50,000 grants for small businesses and 9 percent loans for larger SMEs. He reiterated the government’s commitment to reducing production costs and boosting output as a means to fight inflation. With Nigeria’s population exceeding 220 million, Edun expressed optimism that increased production will meet local demand, strengthen the economy, and attract both domestic and foreign investment.

The government’s economic strategy has been developed in consultation with key stakeholders, including the Manufacturers Association of Nigeria (MAN), the Nigerian Economic Summit Group (NESG), and state governments.