The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has advised the federal government to private redundant public assets as part of its efforts to shore up revenue.
Godwin Emefiele, the CBN governor, at the end of the two-day MPC meeting on Friday, said the committee noted the government’s current drive to increase value added tax, saying this would improve fiscal revenue to support expenditure and reduce the budget deficit and government borrowing when implemented.
VAT is a consumption tax payable on goods and services consumed by individuals, business organisations and government agencies.
Last week, the Federal Executive Council approved the increase of VAT from five per cent to 7.2 percent.
Zainab Ahmed, the minister of finance, budget and national planning, who announced the approval, had said consultations were in being done over when the new rate would apply.
“The committee noted that this was too little to close the gap in government finances. Consequently, the MPC called on the government to as a matter of urgency adopt what it will term a ‘Big Bang’ approach towards building fiscal buffers by purposefully freeing up redundant public assets through an efficient and effective privatisation process,” Emefiele said.
He said this would create significant revenue for government and resuscitate the redundant assets to generate employment and contribute effectively to national economic growth.