Savings: MPC Members Urge Nigeria To Freeze Spending, FAAC Distribution

Members of the Central Bank of Nigeria’s Monetary Policy Committee want the three-tiers of government to reconsider the tradition of bloating their expenditure and over dependence on the Federation Account Allocation Committee (FAAC) disbursement.
To achieve that the MPC called for setting up of strong stabilization programmes and in that way create savings necessary to stabilize the economy against future oil price related shocks, given that the country remains an oil dependent economy.
Members noted the “increasing monetization of oil proceeds as evident in the growing FAAC distribution, relative to the 2017 level of disbursements.”
The Federal Government has however continued to boost the agric sector of the economy as part of its diversification efforts, amidst ongoing efforts to raise tax-to-GDP ratio from its current 6%.
The Federal Government tax amnesty programme tagged: the Voluntary Assets and Income Declaration Scheme (VAIDS), a nine-month window of opportunity to enable Nigerians regularise their tax liabilities ended on Saturday, March 31, 2018.
In a communique at the end of the MPC meeting in Abuja, members “noted with satisfaction the gradual return to macroeconomic stability as reflected in the third consecutive quarterly growth in real GDP in the fourth quarter of 2017.”
While also noting “the continued moderation in all measures of inflation as well as sustained stability in the naira exchange rate and urged the (CBN) to sustain the stability to avoid a mission drift.
“In particular, the Committee welcomed the narrowing of the exchange rate premium between the BDC segment and the Investors’ and Exporters’ (I&E) window of the foreign exchange market.
“Overall, the Committee noted that the recovery of the economy was strengthening, in view of the return to growth of the Services Sector. As the fiscal sector continues to settle its outstanding liabilities, it reduces its domestic debt profile, thus increasing the liquidity of the banking system.

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