FG expresses worries over meeting revenue projections

…Releases N2.079bn capital expenditure as at May 14

…To disburse N649.434bn Paris Club refunds to states soon

Joseph Inokotong, Abuja

The Federal Government has expressed worries over its dwindling revenue base, but downplayed the likelihood of not meeting its revenue projections.

However, it quickly reassured that everything possible is being done to shore up its revenue base in order to meet the 2019 Budget estimates.

To this end, the Strategic Revenue Growth Initiatives, a suite of comprehensive cross-cutting interventions aimed at boosting revenue performance, has been launched.

This was disclosed by the Minister of Finance, Mrs. Zainab S. Ahmed, at the quarterly world press conference held Thursday in Abuja.

The Finance minister said “the time to act is now – if we do not address the long standing issue of ‘unsatisfactory revenue performance’ in our country, particularly in the non-oil sector, we will never realise our shared goal of ensuring appropriate financing for critical sectors such as health, education, infrastructure, and ultimately to creating a Nigeria leaving no one behind”.

Mrs. Ahmed said action has been taken by prioritising revenue generation, and formal launch in January 2019, the Strategic Revenue Growth Initiatives, a suite of comprehensive cross-cutting interventions aimed at boosting revenue performance.

According to her, significant progress has been made since launching the initiatives as taxpayers in Nigeria have increased by 23 million within three years.

Mrs. Ahmed said the taxpayer’s base has increased from 12 million in 2015 to 35 million in 2018.

The Finance minister explained that revenue performance has continued to show improvements, with revenues amounting to N3.96 trillion as at the end of Q4 2018, representing 31% increase over the performance in 2017.

“However, this performance of N3.96 trillion still falls short of this Administration’s budgeted target as the aggregate revenue performance is still only 55% of the projected revenue of N7.16 trillion.

“In 2018 our budgeted revenue was N7.2 trillion. This is against the realised figure of N3.96 trillion, signifying a negative variance of 45%.

Despite this shortfall, we have been able to fully pay salaries and service 100% of our debt.

We have also released seven months overhead for 2018, two months for 2019, and N2.079 billion capital expenditure as at 14th May 2019.

“Consequently, the Ministry of Finance would continue to prioritise revenue generation, and the implementation of the Strategic Revenue Growth Initiatives (SRGI),” Mrs. Ahmed further stated.

She disclosed that Nigeria’s external reserve now stands at $44.69 billion as at May 13, 2019, which grew from $28.3 billion in 2015.

Also, she said that states will soon receive their outstanding balance of the Paris Club debts refunds based on the verification made on a total sum of N649.434 billion by the Ministry.

Mrs. Ahmed said: “For the final phase of the Paris Club debts refunds, the total sum of N649.434 billion was verified by the Ministry as the outstanding balance to be refunded to the State Governments.

“The payment made by the CBN as at March 2019 is N691.560 billion. The increase in CBN payments partly arose from exchange rate differential at the point of payment, although, some states still have outstanding balances, which will be refunded in due course.”

The Finance minister said the Federal Government has adopted a prudent debt management strategy which ensures that it invests what it borrowed in capital projects.

“Although our debt by international standards, at 19.09% Nigeria’s debt to GDP ratio is well below the threshold of 56% for countries similar to Nigeria, the government is addressing the issue of reducing the debt service to revenue through a combination of debt substitution strategies,” she explained.

Mrs. Ahmed said the Federal Government will continue to monitor key global risks, while the Federal Ministry of Finance is focused on taking key mitigating actions to safeguard the economy and ensure it is resilient to external shocks.