The Minister of Finance, Mrs Zainab Ahmed, has called for private sector involvement in Federal Government’s drive in addressing the challenge of low level of revenue to Gross Domestic Product (GDP).
Ahmed made the call while speaking on the topic, “Revenue growth & Economic development: Expectations for 2019” at the dialogue on Nigeria economic outlook 2019 by the Deloitte on Thursday in Lagos.
She said that the country still needed to work toward improving its revenue generation in order to ensure more infrastructural and human capital development.
Ahmed, however, noted that the nation’s revenue to GDP ratio was low when compared to some of its peers in Africa.
The minister said it was important for the country to boost its revenue which had become a critical challenge in mobilising financial resources to deliver on socio-economic development target in the Economic Recovery and Growth Plan (ERGP).
According to her, the Federal Government has embarked on some measures that would help actualise the goal of higher revenue generation.
“Given the low revenue to GDP ratio currently at about seven per cent, we must pursue optimal revenue generation.
“We still need to do more to achieve higher revenue out turn. 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 but debt service was high compared to revenue collections.
This, she insisted indicated the need to prioritise revenue generation.
“By prioritising revenue generation, the Federal Government of Nigeria 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 said the key achievements by the Federal Government included the implementation of the Treasury Single Account (TSA), Integrated Personnel Payroll Information System (IPPIS) across several Ministries Departments and Agencies (MDAs).
This, she added, was to improve public service productivity and increase government revenue and Establishment of Efficiency Unit to cut costs and block leakages.
Ahmed said that the revenue figure of N6.9 trillion in 2018 and a revenue out turn of 55 per cent achievement was not unsatisfactory enough.
Ahmed said 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.
She said that the initiative was in line with the vision of President Muhammadu Buhari administration’s Economic Recovery and Growth Plan (ERGP) that see to how 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 disclossed that the government would soon introduce higher Value Added Tax (VAT) and Excise Duties on carbonated drinks produced in the country.
She noted that most companies in the line of business had not been paying excise 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 that the government would continue to support Micro, Small and Medium Scale Enterprises (MSMEs).
He also said the Federal Government introduced the N500 billion Social Investment Programmes 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.