Government Finance Policies

OVERVIEW OF THE ECONOMIC STABILISATION BILLS Background: The Economic Stabilisation Bills (ESB) which have been approved by the Federal Executive Council contain some recommendations of the Presidential Fiscal Policy and Tax Reforms Committee as part of the Accelerated Stability and Advancement Plan (ASAP) of the government. The ESB seeks to amend about 15 different tax, fiscal, and establishment laws to facilitate economic stability and set the country on the path for sustained inclusive growth. Policy objectives: The proposed changes are designed to achieve the following key objectives: a) Inflation reduction and price stability  b) Complement monetary policy measures with appropriate fiscal interventions to strengthen the naira and sustain exchange rates convergence  c) Promote fiscal discipline and consolidation d) Enhance job creation and poverty alleviation e) Export promotion and diversification Proposed changes: The key changes to be made to the various laws include - 1. Amendments to the income tax laws to facilitate employment opportunities for Nigerians in Nigeria within the global value chain, including the digital economy. 2. Zero rated VAT and improved incentive regime to promote exports in goods, services, and intellectual property. 3. Amendments to facilitate investment in the gas sector and simplify the local content requirements to ensure competitiveness. 4. Reform of the foreign exchange regime to enhance the regulatory powers of the CBN, unlock more forex liquidity, strengthen the naira, and sustain rates convergence. 5. Tax reliefs for private sector employers in respect of wage awards and transport subsidies provided to their employees. 6. Tax relief to companies that generate incremental employment and retain such employees for a minimum of 3 years. 7. Fiscal discipline and enhancement of remittances from government agencies and corporations to the Consolidated Revenue Fund of the federal government. 8. Collaboration with states to suspend certain taxes on small businesses and vulnerable population such as road haulage levies and other charges on transportation of goods; business premises registration; animal trade and produce sales tax; bicycle, truck, canoe, wheelbarrow, and cart fees; shops, kiosks and market taxes and levies. 9. Introduction of “Tax Identification Consolidation and Collaboration (TICC)” initiative to expand the tax base, widen the tax net, and create a level playing field for businesses. 10. Provision of additional funding for the Students Loan Scheme. Next steps: The bills are to be transmitted to the National Assembly for passage into law.

Our new policy paper on European digital sovereignty, for a hard reset. Digital authoritarianism is on the rise. Meanwhile, Europe has become, with some notable exceptions, a digital colony. Technical dependence, in hardware and software, is a dangerous trend for both the European economy and democracy. To counter this, in our view, Europe must assert its digital sovereignty – not in isolation, but on its own terms. Hence “The European Way – A Blueprint for Reclaiming our Digital Future,” written by a strong and heterogeneous group of thinkers and practitioners, led by Kai Zenner and including, e.g., EuroStackers Cristina Caffarra, Sebastiano Toffaletti, AI insiders Dr. Miriam Meckel, Dr. Léa Steinacker, Dr. Till Klein, Dr. Frauke Goll, Björn Ommer, Rasmus Rothe, Joerg Bienert, Sebastian Hallensleben, and many more. Full text: https://lnkd.in/ewQKWmNK To operationalize this vision, we propose 6 interlocking reform packages: 1. Digital Infrastructure & Defence  Launch a European Digital Industrial Strategy that supports cloud, semiconductors, and quantum.  Develop a “EuroStack”—a modular, sovereign European tech stack.  Treat a digital and AI pivot in defence and cybersecurity, with a Digital Defence Fund, as core components of resilience and political autonomy.  Establish a European DARPA, support dual-use technologies, and think digital-first in defence procurement. 2. Digital Single Market & Industrial Policy  Complete the Capital Markets Union to fund digital innovation at scale.  Use public procurement to support European tech companies, via a "Buy European" framework.  Further update competition law to address data asymmetries and promote fair access to platforms.  Strengthen data spaces as a backbone for industrial collaboration. 3. Geopolitical Strategy  Build trusted digital trade partnerships with like-minded allies.  Develop an EU voice in global standard-setting bodies.  Promote tech diplomacy and increase Europe's global regulatory influence. 4. Governance & Institutions  Move toward coherent and principles-based digital regulation that supports innovation and flexibility.  Create a European Digital Enforcement Agency with unified powers for all digital acts, and clear political independence. 5. Energy Supply for the Digital Age  Forge a balanced Energy Mix Deal that supports both green energy and strategic autonomy.  Integrate the European electricity market to ensure stable supply for data centers and critical infrastructure.  Incentivize energy-efficient data infrastructure through regulation and support. 6. Digital Skills, Talent & Education  Launch an EU Tech Talent Initiative to expand training and retraining programs.  Introduce fast-track visas and intra-EU mobility tools to attract digital professionals - with adequate compensation via special funds. IMO, Europe can still lead—but it must act with urgency and vision.

Today we have published the EU State Aid Scoreboard! Every year, we publish the Scoreboard, which shows where public money goes, how it is used, and how State aid rules support Europe’s strategic objectives.   The 2025 State Aid Scoreboard sends a clear signal. 🔹 Overall State aid spending fell from €203.35 billion in 2023 to €168.23 billion in 2024. 🔹 90% of all State aid spending supported EU key priorities 👉 Less spending but more strategic focus.   What stands out in 2024: 🌱 Environmental protection and energy remained the top priority €68.82 billion, representing 45% of all aid for EU priorities, with a strong emphasis on: • Decarbonisation (€30.45bn) • Energy production and infrastructure modernisation (€27.31bn)   ⚡ From crisis response to long-term transition As COVID-19 and broad crisis measures continue to phase out, Member States redirected support towards sustainable investment. €3.84 billion under the Temporary Crisis and Transition Framework (TCTF) supported renewables, industrial decarbonisation and strategic value chains, including semiconductor manufacturing.   🧠 Innovation, cohesion and connectivity • €14.16bn for research, development and innovation • €13.42bn for regional development • €2.62bn for Important Projects of Common European Interest (IPCEIs) • €4.59bn to support broadband rollout   🚜 Support for primary sectors €10.43bn for agriculture, forestry and rural areas, and €212.9m for fisheries and aquaculture.   📉 Crisis aid declined sharply Total crisis-related expenditure dropped to €16.33bn, a 67% reduction compared to 2023, now mainly focused on addressing the impacts of Russia’s invasion of Ukraine.   Finally, the Scoreboard shows continued reliance on block exemptions (GBER, ABER, FIBER), which account for 87% of all active State aid measures, simpler, faster tools that help deliver policy objectives efficiently.   📌 The message is clear: EU State aid is becoming more focused, more efficient, and more aligned with Europe’s green and digital transformation.   If you want to know more👇 https://lnkd.in/eE8PVXDF

Most large-scale energy initiatives follow the same pattern: start with big commitments, roll out connections, figure out the policy later. Nigeria did the opposite. And that’s why it’s working. Instead of treating private investment as an afterthought, Nigeria built the policy framework first. And that made all the difference. What Nigeria Got Right - 1. A Structured Energy Compact – Nigeria created a clear, integrated policy that combines grid expansion, mini-grids, and decentralized solutions into a single plan. Other countries still treat off-grid power as an afterthought. 2. Private Sector Was Built Into the Model – Most African energy plans rely almost entirely on government spending. Nigeria understood that public money alone won’t be enough, so they de-risked the investment landscape for private players. 3. Policy Stability That Investors Can Trust – The biggest deterrent to energy investment is regulatory unpredictability. Nigeria structured clear rules around licensing, tariffs, and long-term market participation, giving businesses and investors the ability to plan long-term—not just react to political cycles. The Results Speak for Themselves - - Nigeria is now the leading mini-grid market in Africa. - Private capital is flowing into the energy sector at scale. - The policy model is structured for real expansion—not just short-term funding cycles. Now compare this to many other Mission 300 countries - - There’s no clear strategy to integrate decentralized and centralized power. - Investment risk is still too high for private capital to flow at scale. - The policy landscape remains too unstable for long-term planning. Nigeria isn’t perfect. But it’s one of the few places where energy policy is being built for growth, not just for the next round of funding. If Mission 300 countries want to make real progress, this is the playbook - - Stable, investment-friendly regulation - A clear plan that integrates all forms of power - Long-term market structures that attract capital at scale Energy access is an industry, not a one-time intervention. And Nigeria is proving that when the policy is right, the investment follows. #NigeriaEnergy #Mission300 #SmartInvestment #EnergyForGrowth

The US government has become a mining investor. In the past six months, Washington has committed more than $30 billion in loans, equity stakes, and guarantees across critical minerals projects. MP Materials, Lithium Americas Corp., Trilogy Metals Inc., Vulcan Elements, ReElement Technologies, USA Rare Earth, Inc. (Nasdaq: USAR), Korea Zinc Company, Ltd (고려아연). The United States Department of War now holds equity positions. Export-Import Bank of the United States approved a $10 billion facility for Project Vault. The Department of Commerce is taking ownership stakes under the CHIPS Act. China controls most rare earth processing, lithium refining, and battery supply chains. Relying on spot markets and private capital alone hasn't closed the gap. So Washington is deploying debt, equity, warrants, and guarantees to backstop projects that would otherwise sit in permitting limbo or fail to attract institutional capital. But the structure reveals something more important. The US isn't just funding projects domestically. It's taking equity in South Korean smelters, Australian cobalt producers, and Jamaican bauxite operations. It's signing bilateral deals with Japan, Malaysia, Pakistan, Thailand, South Korea, and Ukraine. It's using Export-Import Bank financing and Development Finance Corporation tools to extend capital into jurisdictions where Chinese state-backed firms have had a structural advantage. This is the state as limited partner, with geopolitical returns prioritised over financial ones. Sovereign backing is now a competitive variable. Companies with US equity participation or debt guarantees will have easier access to offtake agreements, permitting support, and follow-on institutional capital. Projects without state alignment will face higher hurdles, regardless of grade or jurisdiction. For more of my takes on the resource industry sign up to my weekly newsletter www.kamoacap.com #Mining #CriticalMinerals #Resources #CapitalMarkets #EnergyTransition #RareEarths Sources: https://lnkd.in/g7W3SbW6 https://lnkd.in/gzM-NpK8 https://lnkd.in/gcrqaABs IISS Analysis (chart source)

𝗛𝗮𝗽𝗽𝗶𝗻𝗲𝘀𝘀 𝗶𝘀 𝗹𝗼𝗰𝗮𝗹. The idea that decentralisation might do more than improve governance has long hovered in political economy. This new global study by Ignacio Lago, Cristina de Gispert, Núria Bosch & Maite Vilalta, just out in 𝘗𝘶𝘣𝘭𝘪𝘶𝘴, draws the veil further: when subnational governments wield more spending power —especially if funded by transfers rather than taxes— people report being happier. The authors expand our view beyond the usual Western suspects, examining 131 countries across four years of World Happiness Reports. Their central finding is that greater fiscal #decentralisation leads to greater #happiness. And when those funds come as intergovernmental transfers, citizens experience less of the psychic sting that direct taxation tends to provoke. It seems proximity not only breeds accountability but also #wellbeing, at least when the purse strings are loosened locally. As central governments reconsider the balance of power, they may find that trust, satisfaction, and even joy, flourish best when #governance meets people where they are. The full article is open access via 𝘗𝘶𝘣𝘭𝘪𝘶𝘴: 𝘛𝘩𝘦 𝘑𝘰𝘶𝘳𝘯𝘢𝘭 𝘰𝘧 𝘍𝘦𝘥𝘦𝘳𝘢𝘭𝘪𝘴𝘮 and can be accessed here: https://lnkd.in/dDHrrH67

𝐊𝐄𝐑𝐀𝐋𝐀 𝐑𝐄𝐖𝐑𝐈𝐓𝐄𝐒 𝐓𝐇𝐄 𝐄𝐒𝐆 𝐏𝐋𝐀𝐘𝐁𝐎𝐎𝐊: 𝐍𝐎𝐖 𝐈𝐍𝐃𝐈𝐀’𝐒 𝐅𝐈𝐑𝐒𝐓 𝐒𝐓𝐀𝐓𝐄 𝐖𝐈𝐓𝐇 𝐀 𝐅𝐎𝐑𝐌𝐀𝐋 𝐄𝐒𝐆 𝐏𝐎𝐋𝐈𝐂𝐘 Kerala has crossed a major milestone - its Cabinet has approved India’s first state-level ESG (Environmental, Social, Governance) investment policy, transitioning from aspiration to action. This strategic move signals Kerala’s intent to become a model jurisdiction for sustainable, responsible growth — providing clarity for investors, discipline for corporates, and incentives for ethical innovation. 𝗞𝗲𝘆 𝗙𝗲𝗮𝘁𝘂𝗿𝗲𝘀 & 𝗜𝗻𝗰𝗲𝗻𝘁𝗶𝘃𝗲𝘀: - 100% capital investment reimbursement for 5 years for ESG-aligned projects - 10% subsidy on fixed capital investment (up to ₹50 lakh) - Low-interest financing via Kerala State Industrial Development Corporation (i.e., KSIDC) (nodal agency) for green tech and machinery - 20% procurement preference for ESG-compliant local businesses - Sustainability targets: 100% renewable energy by 2040; carbon neutrality by 2050 - Mandatory ESG reporting under different frameworks such as BRSR (India), GRI, SASB, and TCFD (global) standards - ESG ratings & recognition by SEBI-regulated providers - Digital ESG e-portal for transparency and branding Kerala as an “ESG State” - Implementation term: 5 years (till 2030) led by KSIDC By embedding ESG incentives, accountability, and disclosure standards into its industrial framework, Kerala has transformed voluntary ESG adoption into an enforceable, incentive-backed governance model. 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝗶𝗰 𝗧𝗮𝗸𝗲𝗮𝘄𝗮𝘆𝘀 𝗳𝗼𝗿 𝗘𝗦𝗚-𝗗𝗿𝗶𝘃𝗲𝗻 𝗘𝗻𝘁𝗲𝗿𝗽𝗿𝗶𝘀𝗲𝘀: For Corporates & Industry Leaders - Kerala’s ESG policy raises the compliance baseline. In other words, sustainability, governance, and disclosure are now integral to business viability. Early movers stand to benefit from procurement preference, concessional financing, and reputational leadership. For Startups & MSMEs - ESG is being democratized. Entrepreneurs can now integrate ESG from inception and access capital, incubation, and policy support for innovation in clean tech, waste, and circular economy sectors. For Global & Domestic Investors - Transparent ESG standards, aligned reporting frameworks, and measurable targets reduce jurisdictional and regulatory risk, making Kerala a predictable and attractive ESG investment destination. Kerala’s ESG policy is more than a policy milestone, it is a structural shift in how growth is defined and governed. By embedding sustainability, social accountability, and ethical governance into the legal fabric of industrial development, Kerala has redefined compliance as a catalyst for competitiveness. It sets a national benchmark, proving that responsible growth is not a compromise, it’s the new competitive advantage! ANB Legal I Samik Shah #ESG #Sustainability #Kerala  #ESGLeadership

New modelling shows that government will need to deliver on NHS productivity and prevention promises to prevent health costs spiralling. Joint analysis by LCP and IPPR projects the cost of government-funded healthcare to 2034/35 under various scenarios. If recent trends continue, healthcare spending will grow to over 9.5% of GDP in 2034/35. However, improvements in productivity and prevention could almost completely flatten this growth, with spending remaining at around 8% of GDP in a decade’s time. If delivered, these improvements would provide annual savings of over £50bn in 2034/35, comparable to the current UK defence budget. Excellent work from Andrew Pijper and Dr Godspower Oboli updating previous LCP Health Analytics modelling to reflect the latest data and developments, and new scenarios developed with IPPR for their new report. It was a pleasure to collaborate with Annie Williamson, lead author of the insightful new report "Realising the reform dividend: a toolkit to transform the NHS", which is out today. Links in comments to LCP blog and analysis and the IPPR report.

Africa Can Fund Its Own Healthcare—Lessons from Zimbabwe and Botswana For decades, Africa has relied heavily on donor aid to sustain critical health programs. But Zimbabwe and Botswana have shown that domestic resource mobilization is not only possible—it’s sustainable. 🔹 Zimbabwe’s AIDS Levy – Introduced in 1999, this 3% tax on income funds HIV/AIDS treatment and prevention. Despite economic hardships, Zimbabweans embraced it, ensuring a steady supply of ARVs and reducing donor dependency. 🔹 Botswana’s Universal HIV Treatment – Leveraging diamond revenue, Botswana prioritized free HIV treatment for its citizens, drastically reducing HIV-related deaths and mother-to-child transmission. The lesson? African nations can achieve healthcare self-sufficiency through political will, strategic resource allocation, and strong governance. With global health funding shifting, the time to act is now. By investing in tax levies, public-private partnerships, and domestic financing models, African countries can build resilient health systems that serve their people on their own terms. Let’s rethink health financing for Africa, by Africa. #HealthcareFinancing #GlobalHealth #Africa #Innovation #Sustainability #DevelopmentFinancing #PublicHealth #HealthSystemStrengthening #UniversalHealthCoverage Read more here: https://lnkd.in/e-fteGvM

Tax policy is evolving rapidly. What did reform look like across countries in 2024?   The OECD’s newly released 𝙏𝙖𝙭 𝙋𝙤𝙡𝙞𝙘𝙮 𝙍𝙚𝙛𝙤𝙧𝙢𝙨 2025 report explores key trends and developments across 86 jurisdictions. This year’s edition highlights a shift away from the broad relief measures introduced during the pandemic and periods of high inflation, towards more targeted forms of tax support.   Across many countries, personal income tax relief was expanded to boost employment and address fiscal pressures linked to ageing populations. Tax policy was also used more actively to support the transition to a low-carbon economy, from carbon pricing and targeted VAT reductions on clean technologies such as solar panels, to corporate tax incentives for sustainable investment.   As inflation eased, temporary reduced VAT rates were phased out and, in some cases, standard VAT rates were increased to strengthen revenues. Several governments also raised health-related excise taxes on tobacco, alcohol and sugar-sweetened beverages, aiming both to generate revenue and promote healthier lifestyles.   📖 Read the full report to learn more: https://oe.cd/tpr25 🗞️ Access the press release: https://oe.cd/6at   #TPR2025 #TaxPolicy #OECD #OECDtax OECD Tax