ADVERTISEMENT
TechEconomy
Friday, May 9, 2025
No Result
View All Result
Advertisement
  • News
  • Tech
    • DisruptiveTECH
    • ConsumerTech
      • Accessories
      • Phones
      • Laptop
      • Gadgets and Appliances
      • Apps
    • How To
    • TechTAINMENT
  • Business
    • Telecoms
      • Broadband
    • Mobility
    • Environment
    • Travel
    • Commerce
    • StartUPs
    • TE Insights
    • Security
  • Partners
  • Economy
    • Finance
    • Fintech
    • Digital Assets
    • Personal Finance
    • Insurance
  • Features
    • IndustryINFLUENCERS
    • Guest Writer
    • Appointment
    • EventDIARY
    • Editorial
  • Apply
  • TecheconomyTV
  • Techeconomy Events
  • BusinesSENSE For SMEs
  • TBS
  • News
  • Tech
    • DisruptiveTECH
    • ConsumerTech
      • Accessories
      • Phones
      • Laptop
      • Gadgets and Appliances
      • Apps
    • How To
    • TechTAINMENT
  • Business
    • Telecoms
      • Broadband
    • Mobility
    • Environment
    • Travel
    • Commerce
    • StartUPs
    • TE Insights
    • Security
  • Partners
  • Economy
    • Finance
    • Fintech
    • Digital Assets
    • Personal Finance
    • Insurance
  • Features
    • IndustryINFLUENCERS
    • Guest Writer
    • Appointment
    • EventDIARY
    • Editorial
  • Apply
  • TecheconomyTV
  • Techeconomy Events
  • BusinesSENSE For SMEs
  • TBS
No Result
View All Result
Tech | Business | Economy
No Result
View All Result
Podcast

Home » Subsidies, Tax Breaks Not Magic Cure for Slow Growth – IMF

Subsidies, Tax Breaks Not Magic Cure for Slow Growth – IMF

Staff Writer by Staff Writer
April 12, 2024
in Finance
0
IMF: Subsidies, Tax holidays
IMF logo

IMF logo

RelatedPosts

Illicit Funds for Recapitalization | Naira

Naira Continues to Fall in Official Market, Closes at N1,610/$1

May 9, 2025

Afreximbank Boosts Africa’s Creative Industry with $1 Billion Fund

May 8, 2025

The International Monetary Fund (IMF) has said that subsidies and tax breaks are not absolute solutions to slow economies.

The multilateral lender, in a new report titled ‘Industrial Policy Is Not a Magic Cure for Slow Growth’, said most industrial policies rely heavily on costly subsidies or tax breaks, which could be detrimental to productivity and welfare if not effectively targeted.

According to the global lender, Industrial policy, in which governments support individual sectors, can drive innovation if done right.

It said striking the right balance was a crucial consideration, as history is full of cautionary tales of policy mistakes, high fiscal costs, and negative spillovers in other countries.

The report also noted that many countries were ramping up industrial policy to boost innovation in specific sectors in the hope of reigniting productivity and long-term growth amid security concerns.

The report read in part, “Most industrial policy relies heavily on costly subsidies or tax breaks, which can be detrimental for productivity and welfare if not effectively targeted.

“This is frequently the case, for example, when subsidies are misdirected toward politically connected sectors. In addition, discriminating against foreign firms can prove self-defeating, as such policies can trigger costly retaliation and most countries—even major advanced economies—rely on innovation done elsewhere.”

According to the report, the recent turn to industrial policy to support innovation in specific sectors and technologies is not a magic bullet.

“However, well-designed fiscal policies that support innovation and technology diffusion more broadly, with an emphasis on fundamental research that forms the basis of applied innovation, can lead to higher growth across countries and accelerate the transition to a greener and more digital economy,” it noted.

It advised governments deploying industrial policies to invest in technical capacity, recalibrate support as conditions change, and act in line with open and competitive markets.

It added, “In some cases, industrial policy can be justified, such as when it supports sectors that generate strong knowledge spillovers to the domestic economy (for example, in the semiconductor industry).

United BANK

“Another important use case is driving green innovation—reaching net zero emissions will require technologies that do not yet exist. But subsidies to green innovation should be transparent, focused on environmental objectives, and complemented by robust carbon pricing to minimise fiscal costs.”

Since taking over the reins of power, the Bola Tinubu-led administration has embarked on widespread reforms premised on discontinuing subsidies that many analysts had blamed for Nigeria’s current economic woes

During his inauguration on May 29, 2023, President Bola Tinubu announced that the regime of fuel subsidy had come to an end for good.

Two weeks later, the Central Bank of Nigeria floated the local currency to allow it to find its true value.

The two major policy reforms, despite being met with criticism by some quarters of society, have received applause from international observers.

In an earlier report released in January, the IMF had commended Nigeria and three other countries for recent subsidy reforms that would create space for development spending.

It said, “Building resilience in the face of these trends requires countries to act. Some countries have made progress— for instance, Angola, The Gambia, Nigeria, and Zambia have taken steps to implement significant energy subsidy reforms to create space for development spending.”

It, however, expressed worry that many countries were lagging, especially in efforts to increase revenues, such as broadening the tax base, reducing tax exemptions, and increasing the efficiency of tax administration (Punch).

Loading

United BANK

Author

  • Staff Writer
    Staff Writer

    View all posts
0Shares

Tags: IMFSubsidiestaxTax breaks
Previous Post

Banks Must Embrace Next-generation Solutions to Meet Customers’ Demands

Next Post

Lagos-Calabar Coastal Highway to Cost N4bn Per Kilometre – Umahi   

Staff Writer

Staff Writer

Related Posts

Illicit Funds for Recapitalization | Naira
Finance

Naira Continues to Fall in Official Market, Closes at N1,610/$1

by Latifat Fashina
May 9, 2025
0

The naira fell in the foreign exchange market on Thursday and closed at N1,610/$1, a slight drop from Wednesday's close...

Read more
Professor Benedict Okey Oramah - Afriexim

Afreximbank Boosts Africa’s Creative Industry with $1 Billion Fund

May 8, 2025
Lagos, BOI, Sterling Bank Unveil N10bn Loan Scheme for MSMEs under LASMECO

LASMECO: Lagos, BOI, Sterling Bank Unveil N10bn Loan Scheme for MSMEs

May 8, 2025
cybersecurity levy by CBN and Naira

Naira Tumbles Further across Markets, Hits N1,609/$1 Official Rate 

May 8, 2025
ExxonMobil

ExxonMobil to Invest $1.5 Billion in Nigeria’s Deepwater Sector

May 7, 2025
Afreximbank

Afreximbank to Invest $19 Billion in African Energy Bank

May 7, 2025
Next Post
Lagos-Calabar coastal highway

Lagos-Calabar Coastal Highway to Cost N4bn Per Kilometre - Umahi   

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I agree to the Terms & Conditions and Privacy Policy.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Techeconomy Podcast

Techeconomy Podcast
Techeconomy Podcast

Infowave is brought to you by TechEconomy. Every week we will bring new stories from startups and influencers who are shaping and changing the world we live in. We’ll also bring you reports on topics you should know.

Follow us @techeconomyng for more.

CYBERSECURITY ESSENTIALS
byTecheconomy

BUILDING STRONGER NETWORKS AND COMMUNITIES

CYBERSECURITY ESSENTIALS
CYBERSECURITY ESSENTIALS
April 24, 2025
Techeconomy
Digital Marketing Trends and strategies for 2025 and beyond
February 27, 2025
Techeconomy
Major Lesson for Techies in 2024 and Projections for 2025
December 6, 2024
Techeconomy
Major Lessons for Techies in an AI-Driven World | Techeconomy Business Series Highlights
November 26, 2024
Techeconomy
Maximizing Profitability Through Seasonal Sales: Strategies For Success
November 8, 2024
Techeconomy
Techeconomy Business Series
October 15, 2024
Techeconomy
PRIVACY IN THE ERA OF AI: GETTING YOUR BUSINESS READY
May 30, 2024
Techeconomy
Unravel the Secrets of Marketing Everywhere All At Once with Isaac Akanni from Infobip | Infowave Podcast Episode 1
February 9, 2024
Techeconomy
The Role of Ed-tech in Life Long Learning and Continuous Education
October 19, 2023
Techeconomy
Filmmaking and Technology: A chat with Micheal Chineme Ike
June 7, 2023
Techeconomy
Search Results placeholder

WHAT IS TRENDING

https://www.youtube.com/watch?v=g_MCUwS2woc&list=PL6bbK-xx1KbIgX-IzYdqISXq1pUsuA4dz
uba

Follow Us

  • About Us
  • Contact Us
  • Careers
  • Privacy Policy

© 2025 Techeconomy - Designed by Opimedia.

No Result
View All Result
  • News
  • Tech
    • DisruptiveTECH
    • ConsumerTech
      • Accessories
      • Phones
      • Laptop
      • Gadgets and Appliances
      • Apps
    • How To
    • TechTAINMENT
  • Business
    • Telecoms
      • Broadband
    • Mobility
    • Environment
    • Travel
    • Commerce
    • StartUPs
    • TE Insights
    • Security
  • Partners
  • Economy
    • Finance
    • Fintech
    • Digital Assets
    • Personal Finance
    • Insurance
  • Features
    • IndustryINFLUENCERS
    • Guest Writer
    • Appointment
    • EventDIARY
    • Editorial
  • Apply
  • TecheconomyTV
  • Techeconomy Events
  • BusinesSENSE For SMEs
  • TBS

© 2025 Techeconomy - Designed by Opimedia.

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.