The pace of development in the country is being hindered by the Federal Government due to a lower tax base, which is not on par with other nations that possess a sufficient tax-to-GDP ratio. During a bilateral inter-ministerial gathering on February 6, 2024, Olawale Edun, the Minister of Finance as well as the Coordinating Minister of the Economy, expressed his stance. Svenja Schulze, the German Minister of Economic Development and Cooperation, was also present at the meeting.
Additionally, Dr. Doris Uzoka-Anite, the Minister of Industry Trade and Investment, participated in the event. Among the African continent and various European nations, Nigeria stands out with its relatively meager tax-to-GDP ratio, resting at a mere 10 percent. This figure portrays Nigeria as an outlier, as other African countries and European counterparts maintain higher taxation levels. Edun’s analysis reveals that Nigeria’s tax to GDP ratio stands at a mere 10 percent, and when accounting for states, it slightly rises to 13 percent.
Gov’t relies on these tax funds to carry out its necessary functions.
This figure positions Nigeria among the countries with the most diminutive tax to GDP ratios globally. Tax collection plays a pivotal role in developed countries, with Edun pointing out that it exceeds 50 percent. This substantial amount opens up doors for enticing investments and enables the growth of essential components such as social infrastructure, welfare programs, social services, and numerous other areas. There is simply no escaping the undeniable truth that sufficient taxes must be paid.
Also, this payment will be useful for the government to fulfill its obligations and responsibilities, as he emphasized. The government relies on these tax funds to carry out its necessary functions. The government and people of Nigeria are deeply concerned about the need to boost economic growth, enhance productivity, generate employment opportunities, and alleviate poverty, recognizing that these goals can only be achieved through a flourishing and prosperous private sector. Additionally, the government acknowledges the pressing issue of escalating prices.
Importance of tackling issues related to employment.
More so, this problem poses a challenge for both the authorities and the citizens of Nigeria. President Ahmed Tinubu has made significant strides in addressing the issue of supply and demand, particularly concerning agricultural goods. He has taken proactive measures by supplying farmers with grains and fertilizer, thereby making a crucial intervention in this sector. Additionally, his intervention extends to the production of essential crops like rice, maize, wheat, and cassava, all of which promise to swiftly alleviate inflationary pressure.
Svenja Schulze, the German Minister responsible for Economic Development and Cooperation, emphasized the importance of fostering a bilateral connection between both nations. In light of Nigeria’s abundance of talented youth, she emphasized the necessity of promoting and nurturing this creative potential. Furthermore, she highlighted the crucial importance of tackling issues related to employment, ensuring access to food, and enhancing educational opportunities. In terms of fostering stronger bilateral ties, she emphasized Germany’s eagerness to actively strengthen the bond between the two nations.
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Under the umbrella of MSMEs, there lies a promising opportunity for collaboration between the Ministry of Industry Trade and Investment, under Doris Uzoka-Anite, and the German government. Together, they can focus their efforts on enhancing the expertise of craftsmen and providing them with adequate education. These specific domains ignite the interest of Germany, and through a growing partnership, both nations can foster substantial growth and development. An agreement known as the Memorandum of Understanding (MOU) is set to be signed in order to enhance the efficiency of planning and decision-making initiatives.