The federal government has said its commitment to generate more revenue base informed the decision to implement new taxes to meet targeted revenue of 15 per cent to Gross Domestic Product (GDP). The Minister of Finance, Budget and National Planning, Zainab Shamsuna Ahmed stated this yesterday during the presentation of the highlights/breakdown of the 2020 budget proposal to the public in Abuja.
She said Nigeria could not continue on the current revenue it generates as it will not match the recurrent expenditure, and its targeted workforce. She said there is a need to grow the country’s revenues, and that is why the Ministry of Finance, Budget and National Planning designed and launched a Strategic Revenue Growth Initiatives (SRGI) which is focused on boosting revenue generation for the country to meet its revenue to GDP of 15% as set in the Economic Growth and Recovery Plan which is supposed to be attained by 2020.
The minister who noted that the country is currently at 8% said “we need to do more on that which is why we have shifted the goal to 2023 and looking at what we must do to increase revenue.’’ She added: “The Initiative is planned in three thematic areas which is to achieve sustainability in revenue generation, identify new and enhanced revenue areas and which is why we’ll be looking at implementing new taxes in addition with the one the Federal Inland Revenue Service collects so as to broaden the tax base and enhance growth, and finally implementing a model that advances collaboration with agencies, use of data, synergies that spur growth’’.
She also disclosed that there is a designed monitoring and evaluation process to ensure the targets are attained and appealed to investors and the organized private sector to key into Nigeria’s investments to solve revenue challenges. When asked if the federal government still pays for subsidy, the minister affirmed that “N450bn has been budgeted for the under-recovery which is a fiscal framework for funding the operational cost of the Nigerian National Petroleum Corporation,”
The minister said the money was included in the proposed budget because it captures the cost incurred by the NNPC. She also said that the revenue performance of the 2019 budget was at 55 per cent with (Non-oil revenue at 76% while oil revenue at 77%) that was budgeted half year would have been 4.58trn but the actual budget spent was 3.45trn which represents 76%. On expenditure, she said expenditure performance is currently at 76% (Personnel cost at 99%, debt service at 98% and government spending at 58%).
The minister explained that there was no capital funding releases in the first half of the year due to non-availability of cabinet. “Capital releases did not commence in the first year of 2019 budget because the budget was passed into law on the 27th of May. Also, there were no ministers so releases did not start until late July and as at the last week of September, we have scheduled releases that are up to N650bn and we have a 900bn target by the end of November.
Fiscal outcomes has GDP growth of 2.02 per cent, oil production is 1.86 million barresl per day, but it doesn’t include 100million barrels per day which Nigerian National Petroleum Corporation has been authorized to settle arrears for cash call obligations. Crude oil price is now $67.2 per barrel for the full year. Inflation is at 11.4%,” she said. She further stated that Global Economic outlook has been projected to be at 3.2% in 2020 while the African outlook, growth is expected to rise to 3.6% in 2020. The minister said the key assumptions of the 2020 budget is premised on careful planning and due consultations.
