Frail revenue generation profile is hindering ability to operate the national budget, the federal government has cried out.
A statement from the Ministry of Finance signed by the Special Adviser to the Minister of Finance on Media and Communications, Mr Paul Ella Abechi, said the Finance Minister lamented the nation’s poor revenue generation drive.
According to Abechi: “The Minister acknowledged and pointed out the challenge of revenue generation by the country.
“What we have is revenue problem and when revenues perform the aggregate rate of 55 percent it hinders the ability to operate our budget.
“So it hinders our ability to service all categories of expenditures including salaries, allowances, capitals as well as debts.”
The Minister of finance Mrs. Zainab Ahmed was said to be clarifying Nigeria’s debt to GDP position, which was a major issue at the just concluded World Bank IMF Spring meeting in the USA.
Ahmed said the Ministry is not resting on its oars with regards to boosting the nation’s revenue.
According to her: “What we are doing at the Ministry of Finance is concentrating and enhancing of our revenue and collection capacities.”
She was however happy Nigeria’s borrowing remains at 19 percent to the Gross Domestic Product (GDP).
According to her: “In the borrowing, we are still at 19 percent to GDP, our borrowing is still low.
“What is allowed by our Fiscal Responsibility Act is the maximum of 25 percent of our GDP compared to other countries like; Ghana, Egypt, South Africa, Angola and Brazil and we are the lowest in terms of borrowing.”
On alleged planned removal of subsidy, the Minister said: “Difference on the issue of subsidy as compared to previous regimes where subsidy was paid to marketers, but this time around NNPC is the sole importer of petroleum products.
“And so when they import, they deduct that cost of business before they remit the little money to the federation account. So that is completely different.”
She also added: “It is more cost effective, it is cheaper and what is being done now is easier to monitor.”
The Minister also maintained and assured Nigerians that there is no intention of subsidy removal as government has not come up with any plan in that direction.
“We are not there yet and we discuss this periodically under the Economic Management Team but we have not found a formula that works for Nigeria and you know Nigeria is unique because what works in Ghana may not work here.
“So it is still work in progress and so there is no intention to remove fuel subsidy at this time.”