The Federal Government has launched Strategic Revenue Growth Initiative aimed at mobilising domestic revenues and optimising approach to revenue generation.
Minister of Finance, Mrs. Zainab Ahmed, who spoke during the launch in Abuja Wednesday, January 23, 2019, said growing the Nigerian economy has become a focal point and a priority of her Ministry.
Mrs. Ahmed also said the decision to embark on the programme by her Ministry was guided by the “issues we have outlined in this administration’s Economic Recovery and Growth Plan (ERGP), which include enhancing oil and non-oil revenues, optimising capital and recurrent expenditures, the management of global and domestic fiscal risks, working with our colleagues in other economic MDAs, to closely coordinate Nigeria’s fiscal, macro-economic, monetary and trade policies.”
The Minister who described Nigeria’s low revenue generation capabilities as a huge challenge to past and current governments, pointed out that although Nigeria was celebrated as “the country in Africa with the largest economy, translating this wealth into revenues remains a challenge.”
She stated that it has become increasingly difficult to mobilize domestic funds necessary for human capital development and infrastructure that are both drivers of sustainable economic growth, adding “our current revenue to Gross Domestic Product (GDP) ratio of about 7 per cent is unsatisfactory and we are keen on exerting all efforts in turning this around.”
Continuing she said “the case remains the same with our current contribution between oil and non-oil revenues to oil and non-oil GDP, for which our analysis on oil revenue to oil GDP reveals as 39 per cent while non-oil revenue to non-oil GDP as 4.2 per cent. Our Value Added Tax (VAT) revenue to GDP in Nigeria for example stands at less than 1 per cent (0.8 per cent), which compares unfavourably to the ECOWAS average of 3.4 per cent. So also, is our excise revenue which is 4.1 per cent, compared to Ghana at 15.3 per cent or Kenya at 19.5 per cent.
According to Mrs. Ahmed, the programme would target 99 initiatives over the Short-Term (6 months), Medium-Term (1 year) and Long-Term (2 years) based on potential impact on revenue generation, ease of implementation and implementation timeline.
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Mrs. Ahmed said the programme would focus on three thematic areas: Achieving sustainability in revenue generation to optimally collect revenues to maintain fiscal buoyancy and resilience, identifying new and enhancing the enforcement with regards to revenue collection on the existing revenue streams, and achieving cohesion between revenue generating entities and equipping them with cutting-edge tools and expertise needed to support high performance on revenue out-turn to meet revenue targets that are charged with.
Other government agencies including the Federal Inland Revenue Service (FIRS), Nigeria Customs Service (NCS), Office of the Accountant-General of the Federation, among others, also made presentations on how they would implement the new initiatives.
FIRS, for instance, is expected to grow the country’s tax base, improve collections with existing tax base, counter tax evasion and enshrine cultural change on payment of taxes by citizens, while the NCS would have the responsibility of improving duties collection, establish new customs revenue streams, develop platforms that would drive collections efficiency and collaboration between trade actors and leverage data and technology.
