Revenue enhancement has become a critical challenge to our economic growth – Finance Minister

Harboursandport.com: Lagos - Minster of Finance, Zainab Shamsuna Ahmed, has said that revenue enhancement has become a critical challenge to mobilize fiscal resources to deliver on the socio-economic development targets in the Economic Recovery and Growth Plan (ERGP) which the presidency has mandated agencies to generate more revenues, whilst proactively monitoring collections.

Minister of finance, Zainab Shamsuna Ahmed

“Nigeria has had a pervasive low revenue generation challenge. As the largest economy in Africa, translating this wealth into revenues remains a challenge. We have faced difficulty in mobilizing domestic funds necessary for human capital development& infrastructure” She said.

While disclosing this in her recent keynote address on the topic, “Strategic Revenue Growth Initiative”, an initiative launched by the federal government yesterday at Abuja, Zainab said that she has been guided by the outlined issues in the federal government’s ERGP program.

 “I have been guided by the issues outlined in the FGN’s ERGP: enhancing oil & non-oil revenues; optimizing capital and recurrent expenditures; the management of global & domestic fiscal risks; coordinating Nigeria’s fiscal, macroeconomic, monetary & trade policies”

“Our Value Added Tax (VAT) revenue to Gross Domestic Product (GDP) in Nigeria for example stands at less than 1% (0.8%) which compares unfavourably to the ECOWAS average of 3.4%. So also, is our excise revenue which is 4.1%, compared to Ghana at 15.3% or Kenya at 19.5%. Our initiative is to overturn this aberration.”

“There's a white space to grow our revenues and improve our collections, so we can invest in the sustainable development of our country whilst maintaining a buoyant fiscal position. Consequently, I tasked the Ministry and Ministries, Departments and Agencies (MDAs) to identify actions to turnaround our revenue situation.”

“Our current revenue to GDP ratio of about 7% is unsatisfactory & we are keen on exerting all efforts in turning this around. Our analysis of oil & non-oil revenues to oil & non-oil GDP shows ratio of oil revenue to oil GDP as 39% while non-oil revenue to non-oil GDP is 4.2%.”

“Given the current fiscal terrain & revenue outturn performance - with the realisation of our budgeted revenue at about 50% as at Q3 2018, we have quite a distance to transverse to achieve the ERGP’s target of a tax to GDP ratio of about 15%. This initiative is our response.” She concluded.