…Urges Nigeria to raise tax to 15% of GDP
The World Bank Group President, Mr. Jim Kim, has urged African countries to grow digitalised economies and spread advanced technologies in order not to lose millions of jobs.
Kim gave the advice on Thursday in Washington DC, in a press conference to mark the official opening of the 2018 IMF/World Bank Spring Meetings.
This, he said, became necessary because most global economies have been digitalised and the spread of advanced technologies like 3D printers, robots and artificial intelligence are growing.
“We are extremely concerned that many African countries are not prepared to compete in what is becoming a digitalised economy. We are also seeing lots of evidence that suggest that many of the low skill jobs will be taken over by technology.
“We hope that technology will help many African countries grow and find new ways of driving economic growth,” he said.
Kim also advised Nigeria and other African countries to invest more in education, which he said was the only way to take advantage of the growing economic digitalisation.
“Without adequate education, Africans would learn less and earn less in the future. We have good data on that. When stunting rate is over 30 per cent and sometimes close to 50 per cent, that group of young children will not be prepared to compete in a digital economy in the future. So human capital is a huge issue.”
Kim also harped on the need for Africa to improve its tax system and increase domestic resource mobilisation to build the much needed infrastructure such as roads, schools, hospitals and energy.
“We think that countries should collect at least, 15 per cent of their GDP in taxes and many African countries, including Nigeria, don’t. Also, African countries should remove fuel subsidies, which are very regressive. In other words, they help the rich more than they help the poor.
“Even many agricultural subsidies are also very regressive. They do not help the smallholder farmers but help others in the value chain.’’ Kim also advised African governments to increase tobacco taxes to raise more revenue and reduce smoking.
Meanwhile, in related development, the IMF Managing Director, Ms Christine Lagarde, said that global debt stood at $164 trillion, representing 25 per cent of global GDP. She said the rising debt levels presented risk to low income countries.
Lagarde said that such countries might face hardship and be unable to repay these debts if they don’t get alternatives to borrowing.