Ahmed: Poor Funding Threatens Economic Growth Plan

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Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed

Chuks Okocha in Abuja

The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed has raised the alarm that the Economic Growth and Recover Plan (EGRP) of the federal government is under threat due to poor funding,

This is coming as the Work Bank and the Chairman of Nigeria Governors Forum (NGF) and Ekiti State Governor, Dr. Kayode Fayemi, have called on the state governments to expand their revenue base for improved infrastructure.

The minister who spoke yesterday at the Nigeria Governors Forum (NGF)’s Peer Learning Programme, also said, “regarding the 2019 Budget, as at June 30, the actual aggregate revenue as per our Fiscal Accounts was N2.04 trillion, indicating a revenue shortfall of 42 per cent, due to underperformance of both oil and non-oil revenue targets. Similar revenue shortfalls have been experienced since 2017, when the ERGP was launched, resulting in serious deviations from our targeted revenue and expenditure projections.”

According to the minister, Nigeria requires about $3 trillion over the next 30 years to sufficiently address its infrastructure deficit.

To achieve all these, the minister, who was represented by a director in her ministry, Dr. Isreal Igwe, explained that the country needs fiscal sufficiency and buoyancy, which must come through domestic revenues for it to be sustainable.

“We currently have a pervasive revenue generation problem that must change to successfully finance our development plans. Speaking to the facts, our current revenue to GDP of eight per cent is sub-optimal and a comparison of oil revenue to oil GDP and non-oil revenue to non-oil GDP performance reveals the significant area that requires immediate and dire intervention as the non-oil sector.”

Speaking at the event, Fayemi charged the state commissioners of finance on the need to expand the revenue base so that governors can provide to citizens quality health care and education, world-class infrastructure, in addition to providing social safety to the underprivileged.

He said that the recent fiscal crises of 2015 and 2016 proved that over the years, the country has not done enough to reduce dependence on oil, adding: “We must work towards closing the wide revenue gap in order to position the country to meet the growing development needs”

“This responsibility lies in the capacity of our revenue authorities to improve tax administration capacity and governance especially in the non-oil sectors of the
economy.”

On his part, the World Bank’s Director, Shubham Chaudhuri, in his comments, decried the low level of revenue mobilisation in Nigeria, saying that raising the Gross Domestic (GDP) will ultimately lift Nigerians out of poverty.

He urged government to invest in both human and infrastructural development, noting that the investments would require a lot of revenue, adding that Nigeria do not have enough revenue to do that.

“Raising Nigeria GDP is important because ultimately lift Nigerians out of poverty Will require private investment for job creation, but the role of government is to do two things, invest in Nigeria people, that is the youths, the children, health care, education, social protection and two is to invest in infrastructure which requires revenue”

“But right now, Nigeria does not have enough of it; most of the investments will come at the state level; the best measure of development is of a country is not per capita GDP, but the quality of the services that the sub national government provide.”

He stressed the need for sub national government to deliver on their promises and expectations of citizens.

“You need revenues; our programme has been designed to support you in this regard. The World Bank Programme for result is specifically a performance based form of support, we work with you to identify ambitious but achievable target and based on your achieving those targets, we through the Federal government will help to provide some finances that ease and create fiscal space for you.”