Why we introduced VAT, opted for central collection – Idika Kalu, ex-finance minister - Punch Newspapers

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Yes, I did and we recommended building three green fields and made suggestions about privatisation. Look at how we messed things up. There is no way to explain why we did relatively nothing to bring ourselves here. A lot of foreigners still see that potential in us and they can’t believe that things can be like this for us. Look at our public transportation; look at the industrial content in our GDP when we should have doubled where we are. Look at agriculture in terms of modernisation.

You cannot talk about borrowing in the abstract. It is not the absolute size of the borrowing that should alarm us, but whether what we are borrowing would yield the wherewithal to pay back even though we are also financing things that don’t necessarily yield high returns to pay back, but indirectly they benefit the economy and therefore benefit those sectors that would contribute to the means for repayment, like health, education and other social services.

It is a function of economic policies. The number of the Bureau de Change operators is not the problem but the pricing of the foreign exchange. You can rubbish whatever deleterious effect they were having by making sure they get the currency at the proper rate. When you give it to them with an arbitrage of N100, for example, that is the problem. That poor margin is a problem. If you give the BDCs at the normal arbitrage, their advantage would just be the ease of getting it by the roadside.

I won’t address the issue of whose policy it is. CBN and the government are one and the same. No government, no CBN. No person worth his salt as a leader in the financial world should allow such arbitrage, because for example, why would anybody want to buy it at N500 when others are buying it at N400 or less.

 

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