Edun: Inflation due to eight years of printing naira not backed by production

Wale Edun, minister of finance and coordinating minister for the economy, says the hike in inflation rate is a result of eight years of printing naira not backed by production.

The minister spoke on Wednesday when he appeared before the senate committee on finance.

The committee, chaired by Sani Musa, senator representing the All Progressives Congress (APC), Niger East, is investigating the “Remittance of Internally Generated Revenue by MDAs and Evidence of Payment of 1% Stamp Duty into the Consolidated Revenue Fund Account from 2020-2023.”

Edun said one of the major mistakes that brought the economy to its knees was printing money that did not correspond with improvement in tangible production during the administration of Muhammadu Buhari, former president, for eight years.

The CBN had printed up to N22.7 trillion to lend Buhari’s government to finance its budget deficit.

The loan was a Ways and Means advance, which is currently being investigated by the federal government.

“The inflation is due largely to eight years of printing the naira, which was not matched by production,” Edun said.

As of January 2024, Nigeria’s inflation is 29.9 percent.

Also, while speaking on the efforts made by the federal government to revitalise the economy, the minister said the current administration has undertaken numerous measures, such as stabilising the value of the naira to the US dollar and establishing a more open social welfare program for the weak and vulnerable.

N13 TRILLION REVENUE GENERATED FROM NON-OIL SECTOR IN 2023

Edun said the country realised N13 trillion as revenue from the non-oil sector. 

He said in January 2024 alone, over N100 billion had been remitted, but when compared to January 2023, only N20 billion was remitted into the consolidated revenue fund of the federal government.

The minister said while revenue from June 2023 to December 2023 stood at N3.6 trillion, the total collection for the 12 months of the year was N13 trillion.

Edun told the panel that due to policies introduced by President Bola Tinubu, including digitalising operations for speedy transactions, the government was looking forward to higher non-oil revenue output by the end of December 2024.

“What we can see is a substantial increase in remittances by MDAs and revenue generation agencies,” Edun said.

“We will keep this up and there will be a time we can give further data on this to the committee and the national assembly.”

On the government’s one percent stamp duty collection, Edun said a total of N53 billion was remitted in 2023 or an average of N3.7 billion every month.

“This, I will say, was a positive development. N44 billion was approved by the national assembly, and the actual collection was N53 billion,” he added.

Also, on capital and recurrent budget performance for 2023 and the first quarter of 2024, the minister said N2.9 trillion was the capital spending in 2023.

He said, for 2024 “first-quarter capital releases so far stood at N124 billion, while N581 billion had been spent on salaries and other recurrent expenditures, aside from the N71 billion released for overhead costs”.

‘POLICIES PUT IN PLACE TO REDUCE WASTE’

On revenue lost by the government to import duty waivers in 2023, which was allegedly N3.7 trillion according to reports, Edun told the committee the current administration has implemented a new duty waiver policy to prevent leakages or losses.

According to Edun, the new policy will ensure all import duties are paid in full, with waivers deducted and returned to the affected importers.

He said the outdated process of applying for waivers would be discontinued and replaced by automation, and paying the duties before deducting the waivers would address “the uncertainty on how the process works”.

In addition, Edun said the government has resumed the N75,000 cash transfer program to 15 million households to lessen the impact of the current hardship on Nigerians. 

“Recipients are identified by using their national identity number (NIN) and bank verification number (BVN), which will allow the program to reach approximately 75 million Nigerians for a three-month period,” he added.

In his remarks, Musa said the senate had requested the investigation because Nigeria needed to find alternate internal revenue streams to continue providing services to its citizens due to unstable oil prices.