News hotlines: 08111813019, 08025868561
Email: firstname.lastname@example.org, email@example.com
Going by the recent body language of the Minister of Finance, Mrs Zainab Ahmed, the one month old new federal policy to raise revenue at all cost, Strategic Revenue Growth Initiative (SRGI) may turn out to be counterproductive as it is designed to either introduce new taxes or make tax issues a nightmare for Nigerians and corporate citizens.
Otherwise, government’s concerns about the inability of some agencies to meet their revenue target may push the affected MDAs to go haywire in revenue generation in an economy that is facing lull across every sector and in the process frustrate businesses.
According to government, the SRGI is aimed at boosting the level of revenue generation so as to deliver on electoral promises of leaving the economy better than it met it in 2015.
Just like Dr Ayo Teriba had explained in an interview that “The major challenge of the current administration is the inability to access means needed to achieve the ends it has been promising Nigerians,” Ahmed was quick to admit that it had become a challenge for the government to mobilise fiscal resources to deliver on its developmental objectives.
The minister revealed that “while oil revenue to oil Gross Domestic Product ratio stood at about 39 per cent, non-oil revenue to non-oil GDP was about 4.2 per cent”.
“The country’s VAT revenue to GDP stood at less than one per cent, noting that it was low when compared to the ECOWAS average of 3.4 per cent.
Continuing, she agreed that “In terms of excise revenue, she said at 4.1 per cent, the revenue generated from excise duty in Nigeria was low compared to Ghana at 15.3 per cent and Kenya at 19.5 per cent.
“Nigeria’s low revenue generation capabilities have been an enduring challenge to past and present governments.
“Although we are celebrated as the country in Africa with the largest economy, translating this wealth into revenues remains a challenge.
“We have, therefore, faced difficulty in mobilising domestic funds necessary for human capital development and infrastructure that are both drivers of sustainable economic growth.
“Our current revenue to Gross Domestic Product ratio of about seven per cent is unsatisfactory and we are keen on exerting all efforts in turning this around.”
From all indication, the federal government is currently in a fix to turn around the current appalling revenue situation and forcing MDAs to jerk up revenue generation in a stifled economy may be more disastrous.
The inability of the Federal Government to really make a difference in terms of service deliveries in 2018 was captured from the limited movement of funds across the four quarters.
Otherwise, a breakdown of the amount showed that the sum of N2.01tn was released in the first quarter, N1.63tn in the second quarter while the third and fourth quarter had releases of N1.89tn and N1.82tn respectively.
Further analysis of the document showed that out of the N2.01tn budget releases, N1.39tn was for recurrent expenditure, while N507.16bn and N114.11bn were for capital expenditure and statutory transfers respectively.
Out of the second quarter figure of N1.6tn, the CBN document stated that N1.28tn was spent on recurrent expenditure, N231.93bn was for capital while statutory transfers gulped the sum of N114.1bn respectively.
In the third quarter, the government released N1.58tn for recurrent while the amount released for capital and statutory transfers were N191.36bn and N114.1bn respectively.
For the fourth quarter of last year, the CBN data showed that the sum of N1.6tn was used to fund recurrent items while N108.15bn and N114.1bn were released for capital and statutory transfers respectively.
In terms of revenue, the report stated that in the first quarter of last year, the Federal Government’s retained revenue was put at N884.88bn.
In the second quarter of 2018, the Federal Government earned N1.12tn, while the sums of N1.03tn and N916.44bn were generated in the third and fourth quarter of 2018 respectively.
Business Hilights is an online news channel conceptualized and structured to report and track on a daily basis; latest developments in critical business sectors to serve as a one stop news gateway for governments, foreign and indigenous investors.