Nigeria expects renewed revenue drive to trim debt service

Nigeria's Debt Management Office has expressed optimism that the country can reduce its debt service by 20 per cent over the next four years as it ramps up efforts to boost revenue generation. The Presidential Tax reforms and fiscal policy committee is also working on imposing excise taxes on forex transactions outside the official market. Femi Oladehin, Partner at Argentil Capital Partners, shared his insights on these developments in a recent CNBC Africa interview. Oladehin highlighted the challenges facing the government in communicating effectively with the markets and implementing strategies to address economic issues. He emphasized the importance of creating a conducive environment for businesses to thrive, noting that excessive regulation and market distortions contribute to the existence of informal markets. Oladehin also raised concerns about the government's target to reduce debt service by 20 per cent, questioning the feasibility of such a goal given the current economic conditions. He underscored the need for realistic revenue targets and sound policy frameworks to support sustainable revenue generation. The discussion turned to foreign exchange (FX) market dynamics, with Oladehin explaining that structural issues drive market movements more than government announcements. While recent positive news has led to a temporary appreciation of the Naira, Oladehin cautioned that sustained stability requires addressing fundamental economic challenges. He warned that a significant devaluation of the currency could have severe repercussions on inflation and overall economic stability. The interview also touched on Nigeria's ambitious goal of achieving a $1 trillion economy in eight years. Oladehin acknowledged the target as feasible but stressed the importance of implementing the necessary reforms and creating an enabling environment for investment and growth. He emphasized the role of state governments in supporting economic activities and urged policymakers to focus on improving productivity and reducing barriers to business operations. Despite the challenges facing Nigeria's economy, Oladehin expressed cautious optimism about the country's potential to achieve significant growth if the right policies are implemented.