The Minister of Finance, Mrs Zainab Ahmed, has described the nation’s private sector as critical stakeholder in Federal Government’s current drive to raise its current low level of revenue to Gross Domestic Product (GDP).
Ahmed, who made the call while speaking on the topic, “Revenue Growth & Economic Development: Expectations for 2019”, at a dialogue on Nigeria’s Economic Outlook 2019 organised by Deloitte on Thursday in Lagos, said the country still needed to work toward improving its non-oil revenue generation to boost infrastructural and human capital development investments.
She however noted that the nation’s tax revenue to GDP ratio remains low when compared to some of its peers in Africa and across the world.
According to her, it was important for the country to boost its revenue to be able to deliver on socio-economic development targets set in the Economic Recovery and Growth Plan (ERGP) even as she noted that the Federal Government has embarked on measures that would help actualise the goal of higher revenue generation.
“Given the low revenue to GDP ratio currently at about 7 per cent, we must pursue optimal revenue generation. We still need to do more to achieve higher revenue target. Peer comparison on our ability to convert GDP to revenue for capital and social investment, which are key drivers of sustainable economic growth, show that we have a lot to do to catch up,” she said.
On debt management, the minister said the country’s debt level was sustainable although debt service obligation was high compared to revenue collections, stressing it was indicative of the need to prioritise revenue generation.
“By prioritising revenue generation, the Federal Government intends to continue significant investments in human capital and critical infrastructure to sustain the growth trajectory. We will continue to ensure fiscal discipline and optimise some revenue improvement initiatives that have been achieved so far,” she added.
Ahmed listed the key achievements of the Federal Government to include implementation of the Treasury Single Account (TSA), and the Integrated Personnel Payroll Information System (IPPIS) across several Ministries, Departments and Agencies (MDAs).
She said this was to improve public service productivity and increase government revenue and Establishment of Efficiency Unit to cut costs and block leakages.
Ahmed said the revenue figure of N6.9 trillion in 2018 and a revenue target of 55 per cent achievement was not satisfactory enough.
She added that the effort led the Federal Government to launch the Strategic Revenue Growth Initiatives (SRGI) two weeks ago for sustainable revenue generation across all sectors as the initiative was in line with the vision of the President Muhammadu Buhari administration’s ERGP that seeks to enhance oil and non-oil revenues.
Others include optimising capital and recurrent expenditures, global and domestic fiscal risks management and collaborating with some agencies to coordinate Nigeria’s fiscal, macroeconomic, monetary and trade policies.
She also disclosed that the government would soon introduce higher Value Added Tax (VAT) and Excise Duties on carbonated drinks produced in the country, noting that most companies in the line of business had not been paying excise duty on such products.
Earlier, the Minister of Budget and National Planning, Mr. Udoma Udo Udoma, who spoke on the topic, “Federal Government Budget 2019: What’s in it for Business?”, said the country had, over the years, been planning to reduce the level of borrowing.
The minister said government was currently spending more than 70 per cent of its revenue on salaries, adding that it might not be sustainable. He said it was important that the nation become aggressive in boosting its oil production.
Udoma also said the nation would have to maximise its oil production to get away from being an oil dependent nation.
The minister said the government would continue to support Micro, Small and Medium Enterprises (MSMEs). He also said the Federal Government introduced the N500 billion Social Investment Programmes (SIP) across the 36 states of the federation to address poverty in the country.
This, he said, included the N-Power, Home Grown School Feeding, and Conditional Cash Transfer, among others, meant to assist petty traders, university graduates, NCE holders and other less-privileged Nigerians.