The Minister said this while speaking on Sunday at “The Platform” hosted by the Covenant Christian Centre, Lagos.
She said that the Federal Government was calling for greater focus on the productive sectors of the economy to drive inclusive and sustainable economic growth in the country.
She said: “while mistakes have been made in the past, this administration is looking ahead and laying the ground work to build a resilient economy that is not vulnerable to boom and bust cycles.”
Other speakers at the event included, the Vice President, Professor Yemi Osinbajo, Former Governor of Anambra State, Peter Obi, Professor of Economics Ahmadu Bello University, Professor Abdulraheem Garba, and Chief Economist & Financial Analyst PWC, Andrew Nevin. Others were Prince Bimbo Olashore and Mrs. Nimi Akinkugbe.
The Minister noted that Government revenue remains overly reliant on oil and we must use oil revenue to develop and diversify the economy, not just sustain consumption.
She pointed out that “While oil proceeds have represented between 50 percent and 70 percent of Federal Government revenue over the past 3 years, it has contributed 10% or less to Gross Domestic Product (GDP) in the same period”.
Mrs. Adeosun emphasised that “we must change our growth model to deliver inclusive and sustainable growth by broadening the range of our economic activities in the production and distribution of goods and services.”
She said that the Federal Government wants to create jobs for the people and to do this, we must look beyond the extractive industry. We must invest across the value chain in Agriculture, Construction, Manufacturing and Trade to localise production, processing and distribution. This will create jobs, drive innovation and support knowledge transfer to local businesses.
Adeosun said, “Our focus is on activities that are value adding to the economy to ensure long-term stability. The infrastructure that we build to facilitate power and transportation will be vital in achieving diversification and economic growth. We are focused on addressing the challenges we face to deliver services to our people”.
The Government is investing in massive domestic fertilizer production, making it cheaper to grow the food we need and raw materials to support moribund industries. We are also investing in rail - making it quicker and cheaper to get produce across the country. Our pilot programme has shown that we can reduce the cost of food if we can move it across the country faster.
The Minister noted that Small and Medium Enterprises (SMEs) are critical to broadening our revenue base and we must make it easier for them to do business.
“We will increase our support for innovation and entrepreneurship. Our people are our greatest assets and we must invest in them to build human capital”, she said.
We are also looking very closely at broadening our tax base and improving tax compliance to increase Government revenue: “We have an unacceptably low level of non-oil revenue, and much of that is driven by a failure to collect tax revenues. With a tax to GDP ratio of only 6%, one of the lowest levels in the world, we have a lot of work to do if we are going to build a sustainable revenue base that will deliver inclusive growth”.
We are going to focus on tax in 2017. We will improve our tax to GDP ratio, block leakages and increase compliance. We would also introduce taxes on luxury items and excise duties on tobacco and alcohol.
The Minister explained to the audience that: “More diversified economy would reduce revenue volatility in the long term, encourage more inclusive growth and reduce inequality. With increased Government revenue, we can invest further and faster, delivering further improvements in 2017 and beyond.”