- Safiu Kehinde
Former Nigeria’s Postmaster General, Dr. Ismail Adewusi, has called for balance between the ongoing economic reforms and social equity.
Adewusi made the call during his address at the ongoing 2024 NPO Reports Annual Dialogue at Banquet Hall, Abuja, on Tuesday.
Speaking on the event’s theme “Revenue Generation and Infrastructure Progress in a Challenged Economy”, the ex-Postmaster General of the Federation held that revenue generation and social equity are dependent of each other as one can not thrive without the other.
“Revenue generation and social equity are two sides of the same coin; one cannot thrive without the other.
“As we push for reforms, we must ensure that revenue generation does not come at the expense of social equity.” He said.
Adewusi, who also served as Lagos Commissioner for Finance and later Budget and Economic Plannings under the state’s governorship administration of Bola Tinubu, urged the now President of the Federation to consider subsidizing essential services like electricity and transportation.
He also called for the expansion of access to education and healthcare as well as inclusive infrastructure investment.
“Subsidies should be targeted at essential services like electricity and transportation to shield low-income groups.
“Expanding access to education and healthcare, particularly in underserved regions, is critical for reducing inequality.
“Infrastructure investments must be inclusive, ensuring that rural and marginalized communities benefit alongside urban centers.” He said.
Meanwhile, Adewusi, who is the chairman of the ongoing event, lamented on Nigeria’s over-reliance on the oil sector.
He said the country stands at a critical junction despite boasting of $477 billion GDP in 2023 as he highlighted other challenges bedeviling it.
“Nigeria, Africa’s largest economy, stands at a critical juncture. Despite a GDP of $477 billion in 2023 and immense natural resources, our nation grapples with significant challenges: an over-reliance on oil, a narrow tax base, and glaring infrastructure deficits.
“These issues threaten our progress, but they also present an opportunity – a call to action for all stakeholders to rethink, innovate, and collaborate.” Adewusi said.
He further put the challenges in context which he broke down to economic vulnerability, tax base limitations, and infrastructural deficit.
“Nigeria remains heavily dependent on oil, which accounts for about 50% of government revenue. This dependence exposes us to external shocks. For example, oil prices dropped from over $100 per barrel in 2014 to below $70 in 2023, resulting in revenue instability.
“Tax Base Limitations: Only 41 million Nigerians are registered taxpayers in a population of over 200 million. This narrow tax base significantly limits the government’s ability to generate sustainable revenue and fund critical infrastructure projects.
“Infrastructure Deficit: Infrastructure challenges are evident in multiple sectors. – Only 60% of Nigerians have access to electricity, a key driver of industrialization and economic growth. – Poor transport networks hinder regional trade, reducing our competitiveness in global markets.” Adewusi explained.
On solutions to the challenges, Adewusi called for the expansion of revenue sources, attracting private investment through Public-Private Partnerships (PPP), and adoption of technology-driven solutions amongst others.
“Broadening our tax base is essential. – We must improve tax compliance by leveraging digital tools and simplifying the tax registration process.
“The Finance Act 2020 is a good example of progress, it expanded the tax net by introducing VAT on digital services and optimizing tax collection mechanisms.
“However, this is just the beginning. We need to deepen reforms to ensure all eligible citizens contribute fairly to national development.
“With limited public funds, Nigeria must tap into private-sector resources through Public-Private Partnerships (PPPs). – For example, Kenya’s Nairobi Expressway was financed via a PPP, reducing congestion while minimizing the government’s financial burden.
“Nigeria can replicate this model to fund critical projects, such as modernizing rail networks and expanding power generation capacity. Strong PPP frameworks, underpinned by transparent policies, are key to attracting long-term investment.
“Technology offers innovative ways to address our challenges: Investing in renewable energy can help close electricity access gaps sustainably and developing smart infrastructure will improve service delivery and efficiency.” He added.
Adewusi also called for the prioritization of high-impact sectors such as transportation, energy, and digital connectivity, while citing the Abuja-Kaduna railway project as an instance of such initiative.
“Strategic investment is critical. Priority should be given to sectors with the highest multiplier effect on the economy, such as:
“Transportation: Expanding road and rail networks to improve regional trade.
“Energy: Addressing electricity shortages to power industries and homes.
“Digital Connectivity: Bridging the digital divide to unlock opportunities in the global digital economy.
“Nigeria’s Abuja-Kaduna railway has already demonstrated how infrastructure projects can stimulate trade and regional integration. Scaling such initiatives is imperative.” He said