A think-tank put together by the Port Harcourt City Chamber has pointed to possible N500bn Rivers State can harvest to boost its 2025 budget.
The group also showed how the state could tap into a possible N500bn chest, plus other ways that could fetch up to N100bn to the internally generated revenue (IGR).
The new administration in the state had moved the internally generated revenue (IGR) from about N10bn per month to about N27bn mostly due to transparency in reporting the IGR position of the state.
Now, the think-tank said usually, under-reported or unreported tax is a form of tax audit and reconciliation whereby when taxes are paid by Companies (corporates), it is not unusual that they under pay (that is under-declaration).
It was explained that there are also many who come to the Oil Rigs, dredging sites, etc to work for assigned periods and leave without any form of tax remittance from them or the person they work for. That’s undeclared revenue.
Gov Sim Fubara had presented a N1.188trn budget for 2025, highest ever and this was approved and signed in a jiffy.
Now, the Port Harcourt Chamber of Commerce, Industry, Mines, and Agriculture (PHCCIMA), headed by a female president for the first time, set up a think-tank to review the monetary policy with the insight of private sector practitioners.
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In the submission released to the public, the new president, Chinyere Nwoga, who holds a doctorate degree from an American university, said re-enacting the Rivers State Statutory Savings Account (as proposed) was a good step but urged the state government to ensure the assets do not deplete in value.
PHCCIMA also sued for the eradication of some social taxes on the poor. He told the government to: “Expand the under-declared and undeclared revenue sources with corporates. We estimate an additional N100bn. Expand the upcountry tax collections drive, especially in Lagos and Abuja.
“RSG should emphasise attracting new investments and unlocking value from existing assets. We believe the RSG can unlock over N500b in trapped or recovered assets.
“The Rivers State Government should continue to pursue clearing the backlog of pension liabilities and consider implementing a revised salary structure to motivate their workforce. This shall not drastically affect the CAPEX/OPEX ratio.
“With a revised wage structure, the RSG may pursue deepening the skills set and talent pool in government through prioritising recruitment of specialists into the public sector. In all, it is a well-researched and planned budget. Effective Implementation becomes key.”
Earlier, the PHCCIMA think-tank lauded the Appropriation Bill of 2025, as presented by Gov Fubara, saying; “We also promised to analyse the budget and share our position. After extensive research and analysis, we have come up with a position.”
In the budget review, PHCCIMA said the 2025 total budget approximates N1.2 trillion and is affirmed to be N388b higher than the 2024 figure of N800b. However, when adjusted to the average headline inflation of 32.15% recorded in 2024 (according to the NBS), the Net Present Value of the current budget is approximately N1.1trillion.
“Given the forex dependent structure of the economy, the naira depreciated by a conservative 90% Year-on-Year, from January 2024. This further places the net value of the 2025 budget to about N700b. In simple terms, the Rivers State Government had more purchasing power by this time last year. This further illustrates how the fiscal policies at the centre (FG) can impact even the best run States.
With this in mind, and with no certainty that there will be any significant appreciation of the Naira against the Dollar, PHCCIMA said, it may be wise for Governments to invest in Capital Assets whose future value may double by 2026. Therefore, the Rivers Government’s plan to spend N678b on capital expenditure (roughly 30% over operating expenditure) is very commendable, as evidenced by the ratio analysis.
PHCCIMA harped on what it called sectoral allocations of note where it said the plan to allocate N31b to Agriculture and support programmes for youths shows a strategy for genuine empowerment. “When this is added to the N15.6b allocated for Social Developments and Investments, it creates ample opportunity for the Inclusive Growth. “However, it is advisable that the government should create a credible Youth and Women database needed for articulated disbursements and monitoring. There may be need to update or recreate a strategic state-wide enumeration targeted at Rivers State population.”
The document said given that the millenium development goals (MDG) objectives align with this sectoral pursuit, the government could raise at least 50% of the total funds (not less than N20b) from counter-party multilateral funds. “To attract investment funds aimed at commerce, the government may also consider allotting a percentage of accrued funds in an Investor Guarantee programme. It is noteworthy that the RSG’s budget is self-funded primarily through federal allocation (FAAC) and IGR, rather than debt leverage.
“The policy to explore counterparty funding with the UBE to support education is smart. However, the chances may be less than 50%, given the cash crunch and financial reconciliation backlogs.
“We commend the earnest pursuit and passage of the Rivers State Electricity Market Bill. However, this requires an articulated PPP model in order to garner the interest of notable investors. PHCCIMA can support this initiative by articulating a Private Sector Expectation.
“For the Government to ameliorate their burden in the N98b allocation to the health sector, they may need to recruit consultants to assist the Rivers Teaching Hospital in their internal revenue generation boost, especially the blocking of leakages.”
The PHCCIMA reviewed sources of funding the 2025 budget, the government has posted that the primary sources of funding for the budget were the FAAC, IGR (raised additional N100b), Statutory Allocation. Mineral Funds, VAT, and funds/Escrow/ECA.
The statement said these were commendable, but that there were no buffers to absorb FX risk and ultimately FAAC allocations. “As stated earlier, the budget demonstrates financial prudence and less emphasis on bank borrowing.”
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