Nigeria has for many years been trying on paper and word of mouth to diversify the economy from depending on crude oil earnings. This year has even seen President Muhammadu Buhari taking a perhaps symbolic step by proposing to finance the 2018 budget with non-oil as well as other revenues of N4.165 trillion, while oil revenue is expected to be N2.442 trillion.
The Federal Government’s estimated total revenue is N6.607 trillion in 2018, which is about 30 per cent more than the 2017 target, and according to the President; non-oil revenues will become a larger share of total revenues as the FG continues pursuing its goal of revenue diversification.
However, as was noted during the budget presentation, on revenue performance, collections were 14 per cent below target as of September 2017, mainly due to the shortfall in non-oil revenues. It is therefore important that the government ensures the different revenue generating agencies are duly remitting what is accruable to government’s coffers.
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Preferably, however, we want the government to strengthen the capacity of the private sector to drive growth in the economy, by being productive enough to generate more foreign exchange than crude oil, and paying appropriate taxes without multiple burdens (and duplicities) in payment.
The FG intends to have non-oil and other revenue sources of 4.165 trillion Naira, through; Share of Companies Income Tax (CIT) of 794.7 billion Naira, the share of Value Added Tax (VAT) of 207.9 billion Naira, Customs & Excise Receipts of 324.9 billion Naira, FGN Independently Generated Revenues (IGR) of 847.9 billion Naira, FGN’s Share of Tax Amnesty Income of 87.8 billion Naira, and various recoveries of 512.4 billion Naira, 710 billion Naira as proceeds from the restructuring of government’s equity in Joint Ventures and other sundry incomes of 678.4 billion Naira.
The numbers will however be more feasible when the local economy becomes competitive through the support of consistent government policies that will enable it to thrive. For as long as foreign alternatives are better priced than the Nigerian made goods, this ambition may well be dead on arrival. It is therefore pertinent that whatever has been allocated to infrastructure, particularly power, gets duly and promptly disbursed.
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Also in non-oil revenue, agriculture features prominently. In President Buhari’s speech, while presenting the 2018 budget to the National Assembly, he said “In the non-oil sector, crop production has been one of the main contributors to non-oil growth, which rose to 0.45 per cent in the second quarter of this year. This was primarily driven by our ongoing financial, capacity building and infrastructure development programs.”
Without disputing the effectiveness or otherwise of the development initiatives being referred to by the President, crop production must get appropriate attention. For as long as post-harvest losses of 25 to 60 per cent are recorded in crop production, the country cannot achieve its full potentials. Furthermore, for as long as the activities of violent herdsmen threaten the productivity of farmers, the output will equally drop.
We urge the Federal Government not to get excited and carried away in the event oil prices rise far beyond the industry expectations. Abandoning the attention for non-oil growth whenever the price of crude oil rebounds, will be counterproductive for expectations that other sectors of the economy will contribute to national growth.
