We must bridge 306 and 360/US$ forex rates ― Ahmed
Minister of Finance Budget and National Planning, Mrs. Zainab Ahmed has said there is a need to harmonise the various exchange rates regime in the country.
Speaking in a television interview monitored in Abuja, the Minister said although the foreign exchange has moderated for some time now, “there is still a gap and that gap is what we have to bridge and narrow as much as possible from 305 to 360.
“That is one of our targets,” she stated while disclosing “we have been having a cordial working relationship with the monetary authorities but we have to do more.
“We did a quick assessment on the ERGP’s impact on households. We have agreed that the priority will have to be agriculture and food security, power, petroleum, as well as, oil and gas, manufacturing, as well as, small and medium enterprises; and the alignment of the fiscal and monetary policies.
“Of course security and fight against corruption and we added housing and financing of SMEs.”
Ahmed also said that her team would work more closely with the monetary authorities for better coordination of the economy.
“As a result of the gaps, the monetary authorities are developing or implementing policies that ideally should have been done by the fiscal authorities. So we have to bridge that gap.
“And maybe because there is not enough impetus from the fiscal side, the monetary authorities appear in some cases to be running faster than the fiscal.
“For me, we have been able to establish an excellent relationship with the CBN and working together, we have to determine things that have to do with tariffs, imports and exports.”
She explained that ministries of Finance and that of Budget and National Planning were merged in order to ensure better coordination.
“There was the challenge of the implementation of the budget and there was this gap as to what was seen as a priority as seen by the Ministry of Finance and what was seen as the priority as seen by the Ministry of Budget and National Planning.
“Of course the Ministry of Finance is the treasury so it always had its way because it was the one that was disbursing the funds.
“It created a significant strain and the President decided to bring back the Budget Office to the Ministry of Finance and brought the Planning to the Ministry so that we can maintain the positive trend of linking budget with plans.”
While admitting that her current mandate “is a very wide one,” she explained that she was already working out how things will work between the planning budget and finance.
“My role is to coordinate all these and make sure that, as much as possible, there are no delays in implementation.”
On the nation’s debt portfolio, the minister said that the debt/GDP ratio was not high and that the problem confronting the economy was basically low revenue generation.;
She said that efforts would be increased towards boosting non-oil revenue, in order to bridge the gap.
“We have to become more efficient in our revenue collection as well as enforcement. Tax to GDP is still 7 or 8 per cent to GDP which is too low.
“Our ERGP target is 15 per cent,” she said.
Ahmed declared “we have to increase taxes and we have reduced our dependence on oil revenue. We have to increase our non-oil revenue.
“We have to continue to emphasise our increase in non-oil revenue. Even as we try to maximize what we can’t from the oil revenue.”