- Zainab Ahmed becomes the Minister of Finance and Budget and National Planning
- She will quickly need to attend to urgent economic issues and support monetary policies to reduce the impact of dwindling oil prices on the economy.
- Business Insider looks at five urgent issues before the new Minister.
On July 23, Zainab Ahmed was nominated by President Muhammadu Buhari for a Ministerial role.
Yesterday, August 21st, the President inaugurated his cabinet and assigned portfolios to the new ministers.
In this new role, Mrs. Ahmed will oversee the affairs of the ministry of finance and budget and national planning. She will be supported by Clement Ikanade Agba, the Minister of State, Budget and National Planning.
Why this mattes to Nigerians
By the virtue of her office, Ahmed will coordinate all major activities of the economy. This includes but is not limited to determining tax rates and policies for your business, work with Central Bank to curb inflation and set interest rate (the cost at which you borrow and lend money in an economy).
The Minister of Finance determines the kind of food you put on the table, the clothes you wear and what price you buy your beer at the joint every weekend.
Business Insider looks at five urgent issues before the new Minister:
1. Preparation of the 2020 budget
The Nigerian government had promised to return the budget process on track between January to December every year. In the light of this, the National Assembly-led by President Buhari's core team also expects the executive to submit the 2020 budget proposal next month, September.
Ahmad Lawan, Chairman of the National Assembly and President of the Senate, recently said the legislative body will pass the 2020 national budget before this year’s Christmas holiday.
The urgent work before Zainab Ahmed as the minister of budget and national planning is to ensure that the budget is available in time for onward transmission to the National Assembly and subsequent passage.
2. Controversial VAT, variance in tax target and actual collections
In January, Mrs. Ahmed said the country is working on modalities to increase VAT on some carbonated drinks and luxury items.
Currently, small and medium scale enterprises, startups and the loss-making e-commerce sector, as well as Nigerians, are awaiting the government's green light on the implementation of various tax policies.
At its 125th MPC meeting outcome, the Central Bank of Nigeria (CBN) urged the fiscal authorities to expedite action on expanding the tax base of the economy to improve government revenue and stem the growth in public borrowing.
Nigeria is facing a huge fiscal challenge to meet up with infrastructural development as its population and debt level rise.
To reduce its debt burden, the IMF has also advised it to increase its revenue sources.
3. Collaboration with monetary authority to sustain the economy
Mrs. Ahmed as the Finance Minister is expected to collaborate with the monetary authority on various interventions in the real sector of the economy. Continue work on how to promote economic growth employment and support the agricultural sector.
The CBN has also urged the fiscal authorities to build fiscal buffers to avert macroeconomic downturn in the event of a decline in oil prices.
4. Economic policies to absorb low oil price shock
Getting the economy on a sustainable growth trajectory will require fiscal policy and structural reforms to complement existing monetary policy initiatives.
5. Hit the ground running
As the Minister of Finance and Budget and National Planning, Ahmed is also expected to work closely with the National Economic Council, the Presidency at ensuring their government policies are swiftly put into use.
President Muhammadu Buhari and his cabinet should also do away with ‘Go Slow’ approach.