By Abiola Olawale
President Bola Tinubu has announced a target of achieving a 7% annual economic growth rate by 2027, triggering reactions from analysts.
To support this goal, Tinubu has also ordered a comprehensive review of deductions and revenue retention practices by the Nigerian National Petroleum Company Limited (NNPCL) and other key revenue-generating agencies, aiming to boost public savings and enhance spending efficiency.
The President made this announcement during a Federal Executive Council (FEC) meeting in Abuja on Wednesday.
During the FEC meeting, Tinubu directed the Economic Management Team, led by Minister of Finance and Coordinating Minister of the Economy Wale Edun, to scrutinize deductions by agencies including the Federal Inland Revenue Service (FIRS), Nigeria Customs Service, Nigerian Upstream Petroleum Regulatory Commission (NUPRC), and Nigerian Maritime Administration and Safety Agency (NIMASA).
The President placed focus on reassessing NNPCL’s 30% management fee and 30% frontier exploration deduction under the Petroleum Industry Act (PIA).
Tinubu rationalized that the review is critical to optimizing every available naira, noting that public investment currently accounts for only 5% of Nigeria’s GDP due to low savings.
Emphasising grassroots empowerment, the president pointed to what he called the Renewed Hope Ward Development Programme, a ward-based initiative.
The programme, he said is designed to lift economically active citizens through micro-level poverty reduction strategies in collaboration with states, local governments, and private partners.
While throwing more light on the president’s directive, Edun said macro-economic indicators were improving, with a more stable exchange rate, easing inflation, rising revenues, and debt-to-GDP ratios now within range.
He described savings as the foundation of investment, highlighting that the president’s directive aims to boost public sector savings by reviewing deductions and retention practices.
Edun also said he presented two memoranda before the FEC meeting: a $125 million Islamic Development Bank financing for infrastructure in Abia State, covering 35 kilometres of roads in Umuahia and 126 kilometres in Aba, and a plan to refinance N4 trillion in outstanding electricity sector obligations.
However, some analysts are not particularly excited about this Presidential directive, stressing that it could further deepen the poverty level of Nigerians.
Said Dr Afolabi Ojo, an economist: ” There is the possibility of escalating poverty because when you pool all resources and centralize them, there will be no funds at the local jurisdictions thereby heightened fresh tension and deepening poverty level.”
