The Minister of Finance, Wale Edun, disclosed that Nigeria’s Federation Account has experienced a significant rise in revenue inflow following the removal of the subsidy. Revenue has surged from an average of N650 million to over N1 trillion in the past four months. This revelation was made during the commencement of a four-day retreat for members of the Federation Account Allocation Committee (FAAC) in Asaba.
Representing the minister, the Permanent Secretary, Finance, Special Duties, Mr. Okokon Udo, emphasised that the government had long acknowledged the unsustainable nature of petroleum subsidies. This decision was prompted by the realization that the subsidy regime was depleting funds that could otherwise have been allocated to vital public expenditures.
Mr. Edun stressed the government’s commitment to prioritising the welfare of Nigerians. He assured the populace that the administration would continue implementing policies geared towards promoting the citizens’ well-being. Furthermore, he highlighted the government’s intention to achieve a tax revenue to Gross Domestic Product (GDP) target of 22 per cent and a tax to GDP ratio of 18 per cent by 2026, without unduly burdening taxpayers with excessive new taxes. The approach to achieving this objective involves broadening the tax base and simplifying tax collection procedures.
Moreover, Mr. Edun shed light on the inauguration of a Presidential Committee of Fiscal Policy and Tax Reforms which has submitted an interim report brimming with optimism. Additionally, he acknowledged the challenges faced by Nigerians following the removal of fuel subsidy and the harmonisation of exchange rates. He reiterated the government’s determination to ensure that the economy rebounds to normalcy and affirmed that the administration has put in place palliative measures to alleviate the economic repercussions of these reforms.
Addressing the theme of the retreat, “Creating a Resilient Economy through Diversification of the Nation’s Revenue”, the minister emphasised the necessity of diversifying Nigeria’s economy. This sentiment was echoed by Governor Sheriff Oborevwori of Delta, who underscored the need for the federal government to exhibit the political will required to implement policies and institutional frameworks that would facilitate economic diversification.
Governor Oborevwori’s deputy, Sir Monday Onyeme, echoed the sentiment, asserting that diversifying the economy would require more than rhetoric and necessitate concrete, measurable steps to promote non-oil exports, expand the revenue base, and prioritize sectors such as agriculture, manufacturing, and services. Delta State, he mentioned, is taking the lead in this regard by establishing a Trade and Export unit to drive the process of economic diversification.
The governor also emphasised the mismanagement of Nigeria’s oil wealth and highlighted the disparity between the oil and non-oil sectors’ contributions to the nation’s GDP and public revenue. He stressed that growing the non-oil sector is imperative for widening the revenue base and ensuring maximal benefits from the oil industry.
With stakeholders, including the Accountant Generals from the thirty-six states and the FCT, as well as the Customs, in attendance, the retreat will provide a platform to deliberate on crucial issues such as the payment of 13 per cent derivation to oil-producing states, and the roles of the Nigeria National Petroleum Company Limited in the economic diversification of the country.
Overall, the insights shared at the retreat underscore the crucial role of fiscal reforms and economic diversification in driving Nigeria’s growth and enhancing its revenue base.
