20th November, 2023
The Minister of Finance, Mr Wale Edun, says that the Federation Account is witnessing improved revenue inflow since the removal of subsidy from an average of N650 million monthly to over N1 trillion in the last four months.
The minister stated this on Monday in Asaba at the opening ceremony of a four-day retreat organised for members of the Federation Account Allocation Committee (FAAC).
The minister, represented by the Permanent Secretary, Finance, Special Duties, Mr Okokon Udo, said the government had long realized that petroleum subsidy was not sustainable.
According to him, the subsidy regime eroded revenues that should have been available to fund viable expenditures that were critical to the well-being of the populace.
The minister said the present administration was mindful of the needs and welfare of Nigerians and assured that it would continue to implement people-oriented policies.
“We all know that achieving tax revenue to Gross Domestic Product (GDP) target of 22 per cent and tax to GDP of 18 per cent by 2026 are parts of the cardinal objectives of this administration.
”However, in doing that, we appreciate the need not to overburden the taxpayers by introducing so many new taxes.
”What is necessary to be done is to broaden the tax base, simplify, and streamline tax administration for ease of collection,” he said.
Edun added, “Among the prior activities of this government after coming into office was the constitution of a Presidential Committee of Fiscal Policy and Tax Reforms.
“The committee has submitted an interim report that is full of optimism’’.
The minister also noted that the present administration was not oblivious to the untold hardship faced by Nigerians following the removal of fuel subsidy, and harmonisation of exchange rates.
He reassured that all the sacrifices made by people would never be in vain.
“The government is bent on ensuring that the economy bounces back to normal as we continue to consolidate recovery efforts while focusing on achieving inclusive economic growth and development,” he added.
Edun said that the Bola Tinubu-led administration has so far put in place well-structured palliative measures to cushion the economic consequences of the ongoing reforms.
On the theme of the retreat, ”Creating a Resilient Economy through Diversification of the Nation’s Revenue”, the minister commended the choice, stressing that it was suitable.
Edun also noted that the retreat clearly outlined the urgent need to diversify the nation’s economy.
In an opening remark, Gov. Sheriff Oborevwori of Delta tasked the federal government to muster the political will by putting the necessary policy and institutional framework in place to diversify the nation’s economy.
The governor, represented by his deputy, Sir Monday Onyeme, said that there was no magic wand to diversify the nation’s economy from over-dependence on revenue from crude oil unless concerted efforts were made in other key sectors.
He noted that the diversification of the nation’s economy must go beyond mere rhetoric to concrete, measurable steps by facilitating non-oil exports such as agricultural products, manufactured goods, and services, as well as the expansion of the revenue base.
Oborevwori affirmed that Delta was taking the lead in diversifying its economy by creating a Trade and Export Unit to drive the process of making economic diversification a reality.
He noted that some schools of thought believed that the discovery of crude oil, which led to the neglect of agriculture and other revenue-yielding non-oil sectors of the economy, was a curse.
Oborevwori said the country had not properly managed its oil wealth, adding that it was worrisome that the oil sector contributed between five per cent and seven per cent of the nation’s GDP.
He added that the non-oil sector, mostly agriculture, agribusiness, manufacturing, and small-scale enterprises, contributed 93 per cent to 95 per cent, yet the bulk of public revenue was from the oil and gas sector.
”Statistics have made it more exigent for the government to grow the non-oil sector to widen the revenue base while ensuring that maximum benefits are derived from the oil industry,” he said.
The governor commended the FAAC committee for its commitment to duty by enhancing revenue accruals into the federation account.
He urged the committee to look into the payment of 13 per cent derivation to oil-producing states.
Oborevwori challenged the committee to use the retreat to address the concerns raised by stakeholders concerning the new roles of the Nigeria National Petroleum Company Limited, among others, by giving a better understanding of their roles in the economic diversification of the country.
The News Agency of Nigeria (NAN) reports that Accountant Generals from the thirty-six states and the FCT, as well as other stakeholders such as Customs, are attending the retreat.