Minister of Finance, Budget and National Planning, Zainab Ahmed, has raised the alarm that underfunding threatens the actualisation of the Economic Growth and Recovery Plan (ERGP) and other developmental plans of the Federal Government.
Represented by a director at the Ministry, Dr. Israel Igwe, at the Nigeria Governors’ Forum (NGF) peer learning event, Ahmed said:
“Regarding the 2019 Budget, as at June 30, the actual aggregate revenue as per our Fiscal Accounts was N2.04 trillion, indicating a revenue shortfall of 42 per cent, to underperformance of both oil and non-oil revenue targets. Similar revenue shortfalls have been experienced since 2017, when the ERGP was launched, resulting in serious deviations from our targeted revenue and expenditure projections.”
The minister stated that, Nigeria requires about $3 trillion over the next 30 years to sufficiently address its infrastructure deficit.
To achieve all these, she said that the country needs fiscal sufficiency and buoyancy, which should come through domestic revenues for it to be sustainable.
According to her, “We currently have a pervasive revenue generation problem that must change to successfully finance our development plans.”
“Speaking to the facts, our current revenue to GDP of 8 per cent is sub-optimal and a comparison of oil revenue to oil GDP and non-oil revenue to non-oil GDP performance reveals the significant area that requires immediate and dire intervention as the non-oii sector.”
Ahmed noted that this brings to the realisation that the country lacks the ability to efficiently, and to a reasonable degree, completely collect taxes from its non-oil economic activities.
“Nigeria when compared with peers shows that we are lagging on most revenue streams including VAT and excise revenues as we not only by far have one of the lowest VAT rates in the world but weak collection efficiencies.”
“So also, do we have a lot of incentives and deductions that further constrain the fiscal space that are given in the hope of stimulating growth of our industries and to reduce hardship for the poor and vuInerable.”
By Juliana Taiwo-Obalonye,