Nigeria 2023: Tinubu targets oil, blockchain investment, and tax enforcement  

By Eniola Akinkuotu

Posted on Friday, 21 October 2022 13:32, updated on Wednesday, 23 November 2022 12:24
APC party convention in Abuja
APC party's new presidential candidate Bola Tinubu raises a party's flag with Nigeria's President Muhammadu Buhari next to Abdullahi Adamu, the APC party chairman, during the party convention in Abuja, Nigeria June 7, 2022. Nigeria's Presidency/Handout via REUTERS

Nigerian presidential candidate Bola Tinubu calls for 4 million barrels of crude per day, blockchain regulatory reform, and better tax enforcement in a new policy document.

Tinubu has revealed his plans for Nigeria in an 80-page document that will be launched by President Muhammadu Buhari at an elaborate event on 21 October 2022.

In the advance copy of the policy document obtained by The Africa Report, Tinubu laments Nigeria’s current dwindling oil revenue caused by unprecedented oil theft.

This has made it impossible for Nigeria to meet its OPEC quota even as the country, which for decades held the indisputable title of Africa’s largest oil producer has fallen behind Libya and Angola, producing below one million barrels per day (1mbpd).

However, Tinubu promises to “increase crude production to 2.6mbpd by 2027 and 4mbpd by 2030”.

To achieve this, the All Progressives Congress (APC) candidate promises to establish a special enforcement and monitoring unit to protect the nation’s pipelines by deploying technological interventions like aerial monitoring platforms and drones.

This is at variance with the current system being used by the Buhari administration, which awarded million-dollar pipeline contracts to ex-militants and other private individuals.

The APC candidate promises to ensure a complete deregulation of the midstream sector within six months and increase gas production by 20% and also complete critical gas infrastructure by 2027.

Tinubu promises a full implementation of the Petroleum Industry Act (PIA). This implies – among others – the total removal of opaque petrol subsidy payment that costs Nigeria about $40m daily.

He seeks to secure public-private partnerships and international partnerships towards financing infrastructure.

“We will seek to strengthen our partnerships with key producers in order to modernise our oil infrastructure. For example, Saudi Aramco’s Tera Powers Reservoir modelling platform could aid our industry in finding additional oil and gas deposits. Saudi Aramco’s master gas system has been successful in establishing low cost and clean fuel gas,” Tinubu says.

GDP and tax

The APC candidate also forecasts a steady increase in Nigeria’s GDP by 10% every year, which will ensure a GDP of $780.9bn by 2027.

During his time as governor of Lagos in the early 2000s, Tinubu increased the state’s internal revenue by over 700% through stricter tax enforcement. He is hoping to replicate this at the federal level by expanding the tax net, but without increasing existing taxes.

“Higher taxes drain an already weakened private sector, inviting possible economic contraction and higher unemployment,” he says.

Importation of non-essential products will be discouraged through policy measures, including luxury taxes, higher tariffs and higher processing fees

He therefore promises to review the corporate tax system and deploy technology and effective policies to better rationalise the system. “Our aim shall be to create a progressive tax regime, plug harmful loopholes, enhance the efficiency of collection and give the people a great sense of responsibility in relation to their taxes,” he says.

Tinubu, however, seeks to increase taxes on non-essential imports and luxury goods while at the same time giving tax incentives to international firms that set up local production in Nigeria.

“Importation of non-essential products will be discouraged through policy measures, including luxury taxes, higher tariffs and higher processing fees,” he says.

Tinubu also promises special tax incentives to organisations that employ a certain number of youths. This is targeted at reducing the youth unemployment rate that has exceeded 40%.

Digital economy and blockchain

Tinubu is also targeting one million new jobs in the ICT sector in two years and will be encouraging investments in blockchain.

He says blockchain technology, which allows digital information and transactional records to be securely stored and distributed, could create more jobs in Nigeria. In 2021, the Central Bank of Nigeria (CBN) directed banks to close accounts of persons or entities involved in cryptocurrency transactions within their systems.

Tinubu’s blockchain policy may be a step in the direction towards embracing crypto in a country which is the largest crypto market in Africa.

“We will also explore how Nigeria can take greater advantage of relatively recent innovations, such as blockchain technology,” he says, calling for ‘prudent’ use of cryptocurrencies, and says he will review the current regulations.

“Where necessary [we will]  suggest changes to create a more efficient and business-friendly regulatory framework,” says Tinubu’s policy document.

Resource control

The presidential hopeful promises to ensure that states have a greater autonomy and a fairer share of their resources. Tinubu seeks a constitutional amendment to ensure that states are also given greater powers in the area of tax collection.

Through constitutional amendment, he promises to ensure that states are given “greater control over certain critical matters. Focus areas will include crime prevention, prisons, stamp duties and certain forms of taxation”.

Foreign debt

Tinubu promises to protect the exchange rate, guard against inflation and preserve foreign currency reserves by “limiting our exposure to large debt obligations denominated in foreign currency”.

He says should he be elected, his administration would engage in extraordinary prudence in contracting debt in foreign currency.

Where possible, we shall limit such foreign currency denominated debts…

“Our policy will be such that new foreign currency debt obligations will be linked to projects that generate cash flows from which the debt can be repaid. Where possible, we shall limit such foreign currency denominated debts to essential expenditures that cannot be adequately addressed by either naira denominated expenditure of debt obligations,” he says.

Under Buhari’s watch, Nigeria’s debt stock has exceeded over $100bn. The country’s debt servicing has now surpassed its revenue. The government is now seeking an extension of repayment period and a possible bond buy back.

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