As FG Unveils Revenue Growth Initiatives, MDAs To Get Higher Targets
The Federal Government has unveiled its strategic revenue growth initiatives (SRGI) for sustainable revenue generation to improve government revenues in both non-oil and oil sectors of the economy.
Minister of Finance Zainab Shamsuna Ahmed, who unveiled the initiatives in Abuja yesterday, said capacity of revenue sustainability and creating new revenue schemes could not be overemphasised.
The initiatives will also in the short run define revenue targets for the revenue generating MDAs of the government.
The government has said it planned VAT increase on selected items, mostly luxury products.
In producing the document, the minister said government was guided by the Economic Recovery and Growth Plan (ERGP), which included 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 out 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.
The minster noted that President Muhammadu Buhari has 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 also is the very reason we are all gathered here at this launch event. Challenge of revenue generation has been on over the years despite our being referred to as largest economy in the continent,” she said.
She noted that “VAT revenue to GDP in Nigeria for example stands at less than 1 percent (0.8 percent) which compares unfavourably to the ECOWAS average of 3.4 percent. So also, is our excise revenue which is 4.1 percent, compared to Ghana at 15 percent or Kenya at 19.5 percent.’’
The minister said the “the first thematic area is on achieving sustainability revenue generation to optimally collect revenues, so we can always maintain fiscal buoyancy and resilience.”
The second thematic area, she added, 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 finance minister explained.
Meanwhile, the Federal Government is also introducing tougher measures to end revenue leakages in ministries, departments and agencies (MDAs).
The Accountant General of the Federation (AGF) Ahmed Idris stated this at the workshop on the process of revenue generation, accounting and reporting to the Federation Account Allocation Committee (FAAC) organised by the Office of the Accountant General of the Federation.
The workshop has as theme ‘The Process of Revenge Generation, Accounting and Reporting to FAAC’.
“Mr. President has approved a new and improved performance management framework for the Government Owned Enterprises (GOEs). The objective is to raise revenue generation and the associated remittances into government treasury,” he stated.
He also said the reform initiatives have been approved by Mr. President to generate more revenue and improve the operational performance of all the GOEs.
They include: performance monitoring, expenditure controls, financial oversight of GOEs, and establishment of revenue departments in GOEs among others.
He explained that the performance contracts for CEOs and other key management staff, which will set targets for each GOE will also entail that the OAGF shall mandatorily carry out regular monitoring and ensure monthly publication of revenue and expenditure performance.
On expenditure controls, he explained that “financial circulars on limit of allowable expenses, frequency of board meetings, overseas travels and other potentially wasteful practices shall be strictly enforced.”
Also “annual GOEs’ capital budgets shall be mainstreamed into the Federal Government capital budgets to ensure same level of scrutiny,” he said.
On budgetary and financial reporting requirement, the AGF noted that it shall be mandatory for all GOEs to use the Treasury Single Account (TSA); and the quarterly remittance of interim operating surplus by GOEs shall replace the annual remittance, adding that all the accounts of all GOEs shall henceforth be audited within four months after the end of each financial year.
Mr. Idris also noted that the OAGF is working on the modalities of establishing a revenue department in GOEs to be manned by treasury officers.
