The Nigerian Economic Summit Group (NESG) has asked the federal government to shore up its revenue profile, reduce expenditures and remuneration of political office holders and ensure transparency in public finance management.
NESG said Nigeria is blessed with abundant natural resources, various national assets, and ownership of strategic government-owned enterprises. It expressed concern that the resources generally perform below their potential, raising the question of what needs to be done to unlock greater value from our national assets, optimise returns from our natural resources and improve government-owned enterprises’ efficiency.
The private sector-led economic think-tank made the remarks at a pre-29th Nigerian Economic Summit (#NES29) webinar with the theme “Efficiency to Prosperity: Mobilising Revenue and Resources.”
Speaking at the event, the CEO of Global Mandate Consulting Limited, Dr Suleyman Ndanusa, said igniting economic transformation and establishing a country that guarantees prosperity rests heavily on the government’s financial strength.
Ndanusa said over the past decade, the Nigerian government has faced persistently subdued revenue inflows despite considerable growth in non-oil revenue. He said the situation has become amplified by the sustained contraction in the Oil and gas sector since the outbreak of COVID-19 in 2020.
Despite several episodes of high crude prices afterwards, the government has not been able to push the oil revenue high enough to meet the 2011 level due to issues around production capacity and bulging subsidy payments, and Nigeria’s lack of transparency and accountability in governance and tax collection processes has engendered low commitment to tax payment.
President of the Association of Small Business Owners, Dr Femi Egbesola, stated that there is a need for streamlined policies that encourage collaborations between government and stakeholders and that it is essential for the government to liaise with associations to get taxes from those at the bottom of the pyramid.
He stressed the need for the government to be more transparent about their finances and reduce their expenditures and remuneration of political office holders while reiterating the need for the country to continue diversifying the economy from oil to non-oil products.
President of the International Center for Tax Research and Development (ICTRD), Mrs Morenike Babington-Ashaye, said there should be an organisation committed to economic planning that the government can borrow ideas instead of bringing in foreigners with different ideas.
She said Nigeria is affected by foreign exchange rates, foreign reserves, balance of trade and government expenditure, even as she emphasised the need to minimise political influence on economic activities. She said that tax collection shouldn’t be the government’s only priority, as when people understand how the government works, people can voluntarily pay their taxes.
Mrs Babington-Ashaye pointed out that the significant headwinds to revenue growth in Nigeria are the inefficiency in the revenue mobilisation framework due to leakage in the pipeline of revenue mobilisation.
“Too many government agencies are often involved in revenue collection from households and businesses, leading to multiplicity and duplication of taxes and levies. With such an arrangement, a substantial part of the revenue would have gone into administrative costs, and very little ends up with the government. Moreover, Nigeria operates mostly a regressive tax system with a shallow tax base, which does not often reflect the capacity to pay,” she stated.
Partner, PwC Nigeria, Kenneth Erikume, said that Nigeria is facing challenging times, particularly as it relates to revenue generation, and there is a need for the country to shore up its revenue profile. He stated that there is an urgent need for strategic management of all the channels of government revenue sources to maximise and guarantee revenue growth over the long term.
“The government needs to adequately diversify revenue sources, taking full advantage of sources to grow government revenue. The government needs to harmonise taxes, broaden the tax base, convert informal and implicit taxes into formal government revenue, drive the transition of informal micro-enterprises into the formal economy, and adopt technology in revenue collection, among other issues that need to be addressed,” he noted.
The 29th Nigerian Economic Summit, with the theme ‘Pathways for Sustainable Economic Transformation and Inclusion’, is scheduled for the 23rd and 24th of October, 2023, at the Transcorp Hilton Hotel Abuja.
In light of the urgency of translating economic growth into improved and sustainable living standards for all citizens, this year’s summit theme hints at Nigeria’s potential for sustainable development, leveraging innovative policies, robust institutions, strategic infrastructure investments, and human capital development.
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