- …Says no one should be above the law
By Abubakar Yunusa
Taiwo Oyedele, the minister of finance and coordinating minister of the economy, says the volatility that followed the removal of petrol subsidy and foreign exchange (FX) reforms was unavoidable.
During an interview with TheAfricanReport posted over the weekend,the minister of finance said the government expected a period of instability as it moved to dismantle petrol and FX subsidies.
According to Oyedele, the distortions created by the subsidy regime could not have been removed without short-term economic disruptions.
“If you think about where we started, about three years ago, it was a situation where there was a lot of economic distortion, particularly coming from fuel subsidy, FX subsidy and a lot of other market distortions,” he said.
“To be able to deal with that, you would necessarily have to get a situation of volatility.”
Oyedele said the government anticipated the immediate effects of the reforms, including higher fuel prices, transportation costs and inflationary pressures.
“You remove subsidy, fuel prices would go up. Transportation is affected. Logistics is affected. Price pressure, inflation, right?” he said.
“So those things would happen. And those are the short-term things that we needed to go through.”
According to Oyedele, the reforms were aimed at addressing structural imbalances in the economy and creating a foundation for long-term growth.
Oyedele said the administration believes the economy has largely moved beyond the initial adjustment phase triggered by the reforms.
“And then after that was the stability. Now we’ve had that economic stability,” he said.
According to him, recent economic indicators suggest conditions are improving.
“We’ve seen moderation in inflation,” he said.
“We’ve seen the foreign exchange rate stabilise. And in fact, steady appreciation over the past couple of years.
“We’ve also seen growth, modest growth, but increasing.”
Oyedele, however, said recent geopolitical developments have created fresh pressures on the economy.
“Until recently, no thanks to Iran, Iran war, we’ve seen the foreign exchange rate stabilise,” he said.
The fiscal policy expert said the government’s focus is now shifting from stabilisation to growth.
“So we believe that we are now at a point where we’re moving from stability to growth,” he said.
“To be able to get to growth, we need to unlock some factors.”
According to Oyedele, investments in power, infrastructure and skills development will be critical to sustaining economic expansion.
“One of it is to do with power, infrastructure more broadly. You need skills. You need to deal with issues around over-regulation,” he said.
“Your tax system must be investor-friendly and growth-promoting.”
The tax expert said the administration believes it has made significant progress in laying the groundwork for that transition.
“We have done that to a very large extent. We’re quite proud of the progress we have made,” he said.
“But this is the point where we are now, where we begin to translate those reforms into results.”
Oyedele said the government is also seeking to widen the tax net and strengthen compliance.
The minister said some of the country’s biggest tax evaders have historically operated beyond the reach of enforcement authorities.
“One of the problems is that Nigeria’s political economy still has some very large tax evaders who are almost too powerful to touch,” he said.
“No one should be above the law.”
Oyedele said recent reforms have targeted multinationals, operators in special economic zones, government agencies and high-net-worth individuals.
“Nobody would have thought that it was possible to take on the multinationals,” he said.
“It was possible to take on the special economic zone, free trade zone operators.
“It was possible to take on government agencies, take on the high-net-worth individuals.
“We did all of that already.”
According to him, the government is moving towards a system that compels compliance rather than relying on voluntary participation.
“What we’re doing now is not to rely on the system where people want to comply,” he said.
“It’s to build a system where you have to comply or there’ll be consequences.”
Oyedele said the reforms are part of a broader effort to strengthen public finances and create conditions for sustainable economic growth.
According to the minister, the administration’s priority is to deepen ongoing reforms while ensuring that improvements in macroeconomic stability translate into tangible benefits for businesses and households.
