Business
Weak revenue profile ‘hindering budget operation’
The Federal Government has blamed weak revenue generation for its inability to achieve 100 per cent budget implementation.
But it ruled out the removal of fuel subsidy as advised by the International Monetary Fund (IMF) to shore up its revenue base.
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 Minister Zainab Ahmed “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 per cent, 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.”
Mrs. Ahmed was clarifying Nigeria’s debt to Gross Domestic Product (GDP) position, which was a major issue at the just concluded World Bank/IMF Spring meeting in Washington DC, United States (U.S.).
The minister said the government will not relent in its efforts to boost revenue.
She was quoted by the statement as saying: “What we are doing at the Ministry of Finance is concentrating and enhancing of our revenue and collection capacities.”
The minister was, however, happy that Nigeria’s borrowing remained at 19 per cent to the GDP.
“In the borrowing, we are still at 19 percent to GDP our borrowing is still low. What is allowed by our Fiscal Responsibility Act (FRA) is the maximum of 25 per cent 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 the rumoured planned removal of fuel subsidy, Mrs. Ahmed said: “There is a difference on the issue of subsidy as compared to previous regimes where subsidy was paid to marketers. This time around, the 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.
”It is more cost-effective; it is cheaper and what is being done now is easier to monitor.”
The minister reassured Nigerians that the government has no intention to remove fule subsidy because it has not come up with any plan in that direction.
She said: “We are not there yet and we discuss this periodically under the Economic Management Team (EMT), 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.”