Finance Minister Unveils FG’s Strategic Revenue Growth Initiatives
….to deploy strong coordinating mechanism
The Minister of Finance, Zainab Shamsuna Ahmed, has unveiled Federal Government’s Strategic Revenue Growth Initiatives (SRGI) for sustainable revenue generation in all sectors of the economy.
Ahmed who did the unveiling as contained in a statement signed by the Special Adviser to the Minister of Finance on Media and Communications, Paul Ella Abechi, had the presence of top government officials from various Ministries, Departments and Agencies in attendance.
She recalled that upon her resumption as Minister of Finance in September 2018, she took time to reflect and consider which issues would be prioritised over the course of her stewardship over the ministry, its agencies and its affairs.
According to her she has been guided by the issues outlined by the President Muhammadu Buhari-led 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, macroeconomic, monetary and trade policies.
She also pointed that among these focal issues, revenue enhancement has become a critical challenge in terms of the need to mobilise fiscal resources to deliver on socio-economic development targets as set out in the ERGP, based on the current fiscal terrain and recent revenue outturn performance with the realization of budgeted revenue at about 50 per cent as at the third quarter of 2018, which has a distance to transverse to achieve the ERGP’s target of a tax to GDP ratio of about 15 per cent.
She made it clear to those present at the unveiling that President Muhammadu Buhari mandated the Federal Ministry of Finance to generate more revenues to finance national development as it proactively monitor collections by all MDAs involved in revenue generation.
This mandate is very critical and important and I intend to make it my priority. It is the very reason we are all gathered here at this launch event. The challenge of revenue generation has been with us over the years despite being referred to as largest economy in the continent.
She further stated that the case remains the same with current contribution between oil and non-oil revenues to oil and non-oil Gross Domestic Product (GDP), hence the need to launch the SRGI.
She said: “Nigeria’s low revenue generation capabilities have been an enduring challenge to past and present governments. Although we are celebrated as the country in Africa with the largest economy, translating this wealth into revenues remains a challenge.
“We have therefore faced difficulty in mobilizing domestic funds necessary for human capital development and infrastructure that are both drivers of sustainable economic growth. Our current revenue to GDP ratio of about seven per cent is unsatisfactory and we are keen on exerting all efforts in turning this around.
“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% while non-oil revenue to non-oil GDP as 4.2%.
“Our VAT revenue to 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% or Kenya at 19.5%.
“The first thematic area is on achieving sustainability revenue generation to optimally collect revenues, so we always maintain fiscal buoyancy and resilience.
“The second thematic area is on identifying new revenue streams and enhancing the enforcement with regards to revenue collection on our existing revenue streams.
“The third thematic area is targeted at achieving cohesion between revenue generating entities and equipping them with cutting-edge tools and expertise needed to support high performance, so we can turnaround our current performance on revenue outturn to meet revenue targets that we are charged with.
“The revenue initiatives have been broken into clear implementable portfolios for each relevant MDA and I believe that these are well thought out initiatives targeted at improving our tax base and collections, ensuring we have big data to work with, deploy a single trade platform, among many others.”
The Minister also disclosed a strong coordinating and governance unit will be deployed to monitor progress and results on revenue generation, which she will chair.
“From our end here at the Ministry, we have designed a results framework and we will deploy a strong coordinating and governance unit that will monitor progress and results realization, especially with regards to revenue generation.
“This is to ensure that the resources, time and efforts being used are productive and that the outcomes from the supporting Monitoring & Evaluation framework will guide executive decision-making as well as proposed reforms of the incentives provided for performance by our revenue collecting agencies.”
Meanwhile, she noted that the pointed out that SRGI is critical to development and growth of the economy and national life, and stated that relying on volatile oil revenues that fluctuate depending on international energy markets and prevailing exchange rates have been risky and is beyond government’s control.
“This is why, in the ERGP, we have prioritized the generation and reporting of non-oil as well as oil revenues, to ensure a more sustainable revenue profile for the Federation.
“In this vein, I urge all MDAs represented here to rise to the challenges inherent in achieving the revenue initiatives we are launching today, to make our contributions, as the Federal Ministry of Finance Group, towards a sustainable, inclusive and diversified economic development of our nation. Based on this, I would like to mandate each MDA to own and implement their portfolio in a results-oriented manner.
“Indeed, the journey that we set forth will be a challenging one, but if we can succeed in our individual and collective endeavours, we can attain the stretch targets that come with these initiatives that we are adopting today for implementation”, she stated.
Earlier, the permanent secretary in the ministry and secretary Presidential Initiative on Continuous Audit (PICA), Dr MK Dikwa while giving an overview noted that the new revenue drive was the brainchild of the Minister of Finance, Mrs Zainab Shamsuna Ahmed. He said, “the Strategic Revenue Growth Initiatives (SRGI) “serves as one of the mechanisms that will assist in improving public confidence in the tax system, delivering on governments priorities as it concerns the welfare of its citizens, growing the revenue system while ensuring the full recovery of our stolen commonwealth.
“It is now left for us as reform drivers with the needed political will from the top, to steer the ship in the right direction and this requires a great deal of perseverance, commitment, dedication and discipline on our side to enable solutions that will be beneficial to our country.”