The federal government is keen on making more money and has decided the people have to pay for it by way of an increase in value added tax. The proposed VAT increase is coming against the background of political and economic uncertainly occasioned by long-standing corruption, poor economic management and exacerbating budgetary financing. Nosa James-Igbinadolor reports
There is obviously a gargantuan hole in the country's 'purse'. The World Bank recently noted that fiscal deficits in Nigeria will likely widen further due to increased pre-election spending and sustained revenue shortfalls. Because the economy remains dependent on the 'minute' oil sector, which is less than 10 per cent of the GDP for the bulk of its fiscal revenues and foreign exchange earnings, this makes the country's balance of payments and government budgets vulnerable to volatilities in oil prices.
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