Zainab Ahmed, the minister of finance, budget and national planning, said the federal government has no revenue worries any more as it has the key to unlocking some hitherto untapped revenue sources which were neglected and overlooked.
Specifically, she said funding the 2020 federal budget would not be a problem as new revenue sources, oil and non oil sources, capable of enriching the treasury by N13 trillion and N18 trillion had been identified. She said this would help government achieve its 15 percent revenue to gross domestic product target.
The 2020 federal budget of N10.8 trillion was recently signed into law by president Mohammadu Buhari with a deficit component of N5 trillion.
It also stated that states would need to generate N3.4tn to realise this, adding that the COVID-19 pandemic had brought to the fore the need and urgency to further diversify the sources of government revenue.
Ahmed said the strategic revenue growth initiative of government inaugurated last year would help the government in achieving this revenue growth target.
Ahmed spoke during a webinar that focused on leveraging data to drive inclusive policy, revenue generation and improved governance.
She noted that the pandemic and crash in crude oil price had drastically impacted on government’s revenue, but explained that the Federal Government had been adopting several measures to tackle the challenge.
She said, “Under the SRGI, therefore, we have identified various revenue initiatives that could potentially generate N13tn to N18tn across both oil and non-oil sources, and ensuring that we are able to achieve a 15 per cent revenue to GDP target by 2023.
“Importantly, we recognised that the support of states would be necessary to achieve the 15 per cent target. In fact, the states would need to cumulatively generate about N3.4tn.”
Ahmed said, “Analysis of revenue data shows that as at 2018, Nigeria’s revenue to GDP ratio stood at about eight per cent, significantly below many comparator countries on the continent, as well as the continent average.”
She said the economy faced serious challenges in the first half of 2020, seeing about 65 per cent decline in projected net 2020 government revenues from the oil and gas sector, with adverse consequences for foreign exchange inflows.
Ahmed said government’s anticipation was that these challenges would continue into the third quarter of this year.