PwC: Why FG should focus more on economic growth — not tax

Andrew Nevin, chief economist, PricewaterhouseCoopers (PwC), says the federal government should focus more on economic growth and not just tax.

He disclosed this on Saturday at the Nairametrics economic outlook 2022, themed, ‘Your Money, the Economy and Government Policies’, held virtually.

While highlighting some measures that Nigeria needs to consider to ensure economic growth, he said there should be more on investments to boost revenue generation.

According to him, areas that can shape Nigeria’s economy in 2022 include, harnessing the power of the diaspora, driving export growth through services, and addressing climate-related issues.

“I have never been more optimistic than I am in the past 13 years of being in Africa. The growth in the country has changed shape in five years. Our GDP growth increases but we are not pushing enough of it into investments. We need to at least invest 28 percent to 29 percent of GDP,” Nevin said.

“Africa can’t be prosperous by just exporting raw materials. Africa needs to have more intra-trade to increase wealth.

“I also think Nigeria is on the right direction for initiating digital tax. However, we suggest that the government focus on money economic growth rather than tax, for it is difficult to raise tax when the country isn’t growing. It is also easier for businesses to pay taxes when they are doing well.

“The agricultural sector is a key aspect that needs to be looked into. The issue of insecurity affects food security and the exchange rate is depreciating and that increases inflation. Until we solve the issue of investments, we wouldn’t solve inflation.

“We need to attract investments to be able to close the gap.”