From Isaac Anumihe, Abuja
The Federal Government, yesterday, said that Nigeria’s budget deficit/Gross Domestic Products (GDP) (-4.7 per cent) and Debt/GDP ratios (21.6 per cent) are the lowest among Africa’s leading economies.
Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, stated this at the 27th Nigeria Economic Summit (#27th NES) in Abuja.
According to her, Nigeria will continue to borrow as long as the debt level of the Federal Government is still within sustainable limits.
“Borrowings are essentially for capital expenditure and human development, as specified in section 41(1)a of the Fiscal Responsibility Act 2007. Nigeria’s budget deficit/GDP (-4.7 per cent) and debt/GDP ratios (21.6 per cent) are the lowest among Africa’s leading economies. However, Nigeria’s debt service/GDP ratio (73 per cent as at August 2021) is the highest among same African top economies. Thugs, we do not have a debt sustainability problem, but a revenue challenge. Tax rates and compliance ratios are significantly higher in these comparator countries. For instance, Nigeria’s VAT rate of 7.5 per cent is the lowest in Africa.
“Our target over the medium term is to grow our revenue-to-GDP ratio from about 8 to 9 per cent to 15 per cent by 2025. “Debt-service-to-revenue ratio will cease to be a critical concern. We are implementing a Strategic Revenue Growth Initiative (SRGI) to grow our revenues and some of the key measures introduced include:
setting annual ceilings on tax expenditures to better manage their impact on constrained government revenues” she said.
The minister used the occasion to disclose the share of oil revenues to the federal government, in 2022. She noted that N754.2 billion (representing 56.3 per cent performance of the prorated sum in the 2021 budget) accrued to the federal government pplwhile non-oil tax revenues totalled N1.15 trillion (115.7 per cent over and above the target).
“Companies Income Tax (CIT) and Value Added Tax (VAT) collections were N547.54 billion and N235.77 billion, representing 121 per cent and 148 per cent respectively of the prorata targets for the period.
Customs collections was N338.66 billion (99 per cent of the target).
Other revenues amounted to N1.71 trillion, of which FGN Independent revenues was N691.36 billion while Government-Owned Enterprises (GOEs’) retained revenue was N873.52 billion” she said.