 Fiscal Policy measures for 2000 |
The 2000 fiscal policy has definitely been waved to boost the national economy by stimulating investment, protecting local infant industries and consequently generate employment.
The measures brought in by the Government are mainly focused on tariffs on imported goods. Those measures include reduction of import duty rates on raw materials for manufacturing, duty concession on the importation of essential machinery and spare parts for the productive sectors of the economy, and duty concessions on the importation of educational materials.
The Central Bank of Nigeria estimates overall manufacturing capacity utilisation at 34 per cent only. The duty concessions and downward review are expected to step-up the capacity utilisation in year 2000.
Import duty concession on raw materials for the manufacturing of pharmaceutical products should boost the pharmaceutical sub-sector. Reductions in tariff on importation of iron and steel will benefit industries such as building and construction. With the tariff on paint paints lowered, and zero duty concession on plants, machinery and spare parts to bonifade cement manufacturers, housing construction cost will be reduced provided government takes further steps to reduce legal charges associated with land such as tenement rate, stamping charges and registration cost. | Reduction in tariff on importation of fertilizer will make the commodity cheap, easily accessible to farmers and consequently agricultural production. But this policy measures should be supported with good roads and water supply in the rural areas as well storage infrastructure. These should be provided by the government also.
Beside agricultural products, there will be reduction of import duty on petroleum products, soaps and detergents, tyres and tubes, paper and printed items.
Import duty on milk has also been reduced significantly. This a welcome development considering the fact that milk is currently very expensive and unaffordable by many.
The textile companies will also benefit from duty concession. They have so far suffered from high import duty and dumping. Besides, this branch is highly power-driven and labour-intensive and the forthcoming restructuring of the power sector should therefore represent a great relief for the textile industry.
Specific fiscal measures have also been taken to reduce ports charges and make the ports users-friendly.
Import duty on some finished goods have been increased partly in order to protect domestic industry from unfair external competition but also to limit consumption of unhealthy products. Those concerned are mainly stout, beer, wines, fermented beverages, bleaching creams etc.
Exporters will benefit from the abolition of the 10 per cent administrative charges paid to the Nigerian Export Promotion Council. This completes the package of incentives designed by the government to stimulate export and increase the nation's foreign exchange earnings. These fiscal measures will reduce the cost of doing business by the exporters and likely attract some additional businessmen into export.
Last, the government has proposed $100 million for the creation of 200,000 jobs through poverty alleviation measures. This reflationary package should boost aggregate demand to match the supply-side potentials targeted by the measures quoted above. |
