Unemployment: Nigeria must create five million jobs annually for 10 years ― IMF

• as FG may increase VAT rate to 10per cent in 2022

International Monetary Fund (IMF) has declared that Nigeria must create five million jobs annually in the next 10 years to dent the scourge of growing unemployment.

According to a document released at the weekend, IMF also asked the Federal Government to increase the rate of value-added tax (VAT) to 10 per cent in 2021 and 15 per cent by 2025.

“To accommodate a growing number of young people entering the labour market, Nigeria will need to create at least five million new jobs each year over the next decade.”

The Fund also asked the government to broaden its export base which has not fundamentally changed over the decades, with hydrocarbon products still accounting for 90 per cent of the country’s exports today as they did in the 1970s.

“Successful economic diversification requires trade openness and competitive discipline.

“The limited gains from inward-oriented policies in terms of creating jobs and improving living standards suggest that Nigeria needs to change course.”

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Noting that Nigeria has one of the lowest revenue levels as a share of GDP worldwide, the Fund said “increasing tax rates, enhancing transparency and aggressively fighting corruption are some of the conditions, which the country agreed to entrench before IMF approved the $3.5 billion loan it got last year.

“A large share of revenues is spent on the country’s public debt service payments, leaving insufficient fiscal space for critical social and infrastructure spending and to cushion an economic downturn.

“In this context, mobilizing revenues through efficiency-enhancing and progressive measures is a top near-term priority.

“Revisiting tax exemptions and customs duty waivers, increasing and broadening the base for excise taxes, developing a high-integrity taxpayer register, enhancing digital infrastructure, and improving on-time filing and payment are important measures.

“Once economic recovery takes root, Nigeria will need to increase the value-added tax rate to at least 10 per cent by 2022 and 15 per cent by 2025—the average in countries belonging to the Economic Community of West African States—to create effective fiscal space.”

IMF also asked the central bank to gradually devalue the official exchange rate to meet the black market.

“Unifying the various rates into one market-clearing rate would establish policy credibility.

“Sustained premiums in the parallel market and unmet foreign exchange demand indicate the need for further adjustment in the exchange rate to reduce the gap between supply and demand.

“An appropriately valued exchange rate and a clear exchange rate policy would also help instil confidence and private sector-led recovery.”




Unemployment: Nigeria must create 5mn jobs annually for 10 years ― IMF

Unemployment: Nigeria must create 5mn jobs annually for 10 years ― IMF

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