The minister of finance and coordinating minister of the economy, Mr. Wale Edun, has announced that the federal government plans to grant tax breaks to companies that hire more staff. Additionally, the government will offer more import duty suspensions on certain goods to help curb rising inflation.
In an exclusive interview on AIT’s Money Line, Edun explained that these measures are part of the Inflation Reduction Act, which is expected to be signed by the President in a few weeks. The fiscal measures aim to lower the cost of production for businesses, which has increased due to the weak exchange rate and other policies introduced by the current administration.
He stated, “The Inflation Reduction Act will include a range of import duty exemptions, tariff reductions, and tax breaks for employment. If you hire more people, you will receive a tax break. A range of fiscal incentives will be outlined in an executive order, which the President will sign in due course.”
Edun also revealed that the federal government spends approximately $600 million monthly on petrol imports. He noted that this high fuel import bill is partly due to neighbouring countries and Central Africa benefiting from Nigeria’s fuel imports.
He emphasised that efforts are underway to ensure the availability of homegrown food. In the short term, apart from distributing grains from strategic reserves, importation will be allowed due to the President’s commitment to reducing prices and ensuring immediate food availability. He assured that this measure will not undermine local farmers, as imports will only be permitted after exhausting local supplies. Auditors will verify that all locally- available produce has been utilised.
These interventions are designed to reduce inflation, stabilise exchange rates, and lower interest rates, thereby fostering a favorable environment for investment and job creation.
The minister explained that the government has not approached the central bank for funds to pay government debts or salaries, known as Ways and Means. Instead, they have used market instruments to reduce what they owe, which is crucial for maintaining a strong economy. He clarified that while the limit has been raised to 10 per cent, this increase serves as a safety measure to provide additional flexibility in case of timing gaps between incoming revenue and expenses.
