Kunle Aderinokun, Obinna Chima, Funke Olaode, Kasie Abone and Nosa Alekhuogie in Washington DC
The Minister of Finance, Mrs. Kemi Adeosun, has lamented that with a tax to Gross Domestic Product (GDP) ratio of six per cent, the country is rated one of the lowest in the world.
Adeosun, who revealed this during an interview on the sidelines of the ongoing 2017 Spring Meetings of the IMF-World Bank/IMF in Washington DC, said the situation was unacceptable, stressing that the government has a lot of work to do.
But the minister pointed out that the government would require the support of all stakeholders to achieve its objective of increasing non-oil revenue.
“We have the tax to GDP ratio of six per cent, one of the lowest in the world. And with all the cooperation of encouraging companies to pay tax, it will support what we are doing to increase our GDP, improve amount of debt to take and improve our ability to fund our projects and get our economy going. This is fundamental. The World Bank made some comments about Nigeria’s debt. The problem is not our debt; it is because our revenue is too low. So we have to do something fundamental about the revenue improvement. That is what we are going to be working on.
“The point I was making was about illicit financial flow in the G24 meeting is about the money that has left our countries especially Nigeria – gone abroad either through tax evasion or through money laundering. Really, we need these monies back in Nigeria and what we are working on is a revenue initiative that would bring a lot of this money back so we can fund our infrastructure,” she explained.
Adeosun said the federal government’s delegation at the forum had been having bilateral meetings, saying that a meeting with the World Bank was to review the bank’s portfolio in Nigeria, how it was performing as well as how to improve on the World Bank projects in Nigeria.
According to her, the meetings she had with the rating agencies were positive, saying that they all indicated that the country would return to growth this year.
“We have met with the African Development Bank looking at similar type of review, such as project, looking at what is not working and what to improve on. We have also been meeting with rating agencies talking about how Nigeria economy is performing and how Nigeria’s economy will return to growth in 2017 and how it can be sustained. This gladdens my heart. So we have had a number of meetings that cut across many areas.
“There is a general consensus that Nigerian economy will grow in 2017. The point is that what do to sustain that growth is to ensure that it translates to good life for our people (the masses); how do we translate money spent on infrastructure into jobs? That is the next level.
“Last year was a ground preparation: You know how to get our road going, the rail, the power and now it is about how we translate the man on the street getting a job. And when we leave here now we are going to look on how to implement what we discussed, agriculture inclusive. Today (Friday) we are going to discuss power because power on its own can transform the man on the street or having an improvement in his standard of living. Power alone can transform our GDP growth and improve the economy,” she added.
When asked about the country’s budget support request from the World Bank, Adeosun said: “We have a budget and we have a plan around the medium term strategy which include the World Bank. We have been talking about that. But that is not the focus of this Spring Meetings. The focus is what our economy strategy is all about and how we are going to improve on it.”
Meanwhile, remittance flows to Nigeria fell by 10 per cent in 2016, the latest edition of the Migration and Development Brief released has shown. The report also showed that, that was the second consecutive year remittance flows into the country would decline, a trend not seen in three decades. The development was largely attributed to slow economic growth in remittance-sending countries; decline in commodity prices, especially oil, which impacted remittance receiving countries; and diversion of remittances to informal channels due to controlled exchange rate regimes in the country.
Generally, it revealed that remittances to Nigeria and other countries in Africa declined by an estimated 6.1 percent to $33 billion in 2016. Similarly, remittances to other major receiving countries were also estimated to have fallen last year, including Bangladesh (-11.1 percent) and Egypt (-9.5 percent).