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AfricaJuly 2 2019

Nigeria's information minister looks to maintain crackdown on corruption

Nigeria’s minister of information and culture, Lai Mohammed, sat down with The Banker in London to talk about president Muhammadu Buhari's government’s priorities for its second term in office. Joy Macknight reports.
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Lai Mohammed

Lai Mohammed

Q: President Muhammadu Buhari was re-elected in February – what will his administration focus on during its second term?

A: The government has an opportunity to consolidate the gains it made in its first term in areas such as fighting corruption, revamping the economy and, particularly, tackling security issues. We can’t discuss investment and the economy without addressing security. A major challenge we faced was the terrorist group Boko Haram, which occupied territory the size of Belgium before we came to power. But today their support has been massively depleted. The threat still exists, no doubt, but the government is working closely with international partners, both at a regional and global level, to ward off Boko Haram.

We are also battling banditry, cattle rustling and criminality in other parts of the country, particularly the north-west. The government has set up a joint force between the air force, military, army and police to flush them out, but we also need to address the root causes of criminality, such as a lack of education, opportunity and hope. Therefore, building infrastructure is a priority for the government. The government has spent N2500bn [$6.95bn] on roads, railways and power projects [since 2016]. We see infrastructure as a key to economic development.

Furthermore, our social investment programme [SIP] has helped to lift up many people at the bottom of the pyramid. The SIP has four components: youth employment, a school feeding programme, a monthly national stipend and interest-free loans for micro, small and medium-sized enterprises.

Q: Nigeria is ranked 146th in the World Bank’s Doing Business ranking for 2019. How have government initiatives addressed the ease of doing business in the country and increased tax revenue?

A: Fighting corruption has become the bedrock of the administration because we see the correlation between corruption and underdevelopment. With the implementation of the treasury single account, all government revenue is paid into one account at the central bank. This is a far cry from four years ago, when there were about 22,000 accounts and the government didn’t have a clear overview. So today we have greater transparency and accountability as to how government resources are spent.

In addition, the whistle-blowing policy [introduced in December 2016] has led to about $53m being recovered. The policy gives protection to those who blow the whistle and they are entitled to a portion of what is recovered.

Our new national digital platform for registering companies and filing tax returns has helped with ease of doing business because new businesses don’t need physical contact to register a company or file a tax return. This gives investors confidence. We have also implemented tax incentives for companies [in key sectors] and the 'visa on arrival’ policy has also eased investors’ and business visitors’ concerns. These are areas that the government wants to improve upon in the next four years.

We have also added 5 million people to our tax base. So rather than overtaxing the few that are paying, we have increased revenue by expanding the base.

Q: Are there any plans for the Central Bank of Nigeria to change its current policy of multiple foreign exchange rates?

A: The naira and dollar are converging naturally at about N360 to $1. We believe that with inflation going down and reserves going up, it is important to protect the currency. But overall, we expect a better investment climate over next four years. According to the central bank governor [Godwin Emefiele], about $5bn in foreign direct investment has come into the country since the election in February. That [shows] the investor community’s confidence in the country.

Q: What is the main challenge facing the Nigerian economy?

A: The biggest challenge is population growth. The population is increasing by 3% [a year] but gross domestic product [GDP] growth is about 2%. Until we can invest more in infrastructure and strengthen the economy, we will continue to face challenges. The government’s major concern is investing in infrastructure because without power we won’t be able to have the kind of growth we need.

But, in saying that, we have managed six consecutive quarters of growth. Some complain that growth is a bit slow, but model reform programmes can’t change the situation overnight. Three to four years is a short time to turn a large economy [around]. But we are consistent and committed, so we will see incremental increase in GDP over time. I believe that the worst is over for us. It was difficult to climb out of recession, but six consecutive quarters of growth point to an economic recovery that is working.

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Read more about:  Africa , Africa , Nigeria
Joy Macknight is the editor of The Banker. She joined the publication in 2015 as transaction banking and technology editor. Previously, she was features editor at Profit & Loss, editorial director at Treasury Today and editor at gtnews. She also worked as a staff writer on Banking Technology and IBM Computer Today, as well as a freelancer on Computer Weekly. She has a BSc from the University of Victoria, Canada.
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