Wale Edun, the Minister of Finance and Co-ordinating Minister of the Economy, has said that the Federation Account is witnessing improved revenue inflow since the removal of fuel subsidy from an average of N650 billion monthly to over N1 trillion in the last four months.
The minister disclosed this at the opening ceremony of a two-day retreat for Federal Account Allocation Committee (FAAC) organised by the Federal Ministry of Finance in collaboration with Delta State Government.
According to a statement issued by Stephen Kilebi, director of press of the ministry, the minister noted that the economic reforms the administration has embarked on since its inception in May 2023 clearly outlined right steps to transformation of the country’s economy.
These reforms according to him includes: petroleum subsidy removal, fiscal and monetary policies reforms aimed at removing multiple taxation and streamlining/simplifying tax administration as well as achieving single foreign market that will ensure willing buyers and sellers.
Okokon Ekanem Udo, permanent secretary, Ministry of Finance, representing the minister stated that the reforms are applauded not only by the experts within the Nigerian economy but also International Development Partners such as the International Monetary Fund and the World Bank among others, noting that, these reforms are what Nigeria as a country needs right now to move from its perennial problems.
Read also: FG reveals N1.45trn saved from subsidy removal
He explained that Government is not oblivious of the untold hardships faced by Nigerians following the removal of petroleum subsidy and harmonisation of exchange rate, affirming that “all the sacrifices will not be in vain as government is bent on ensuring that the economy bounces back to normal as we continue to consolidate the recovery efforts on achieving inclusive economic growth and development.
“The Federal Government as always, will remain committed to the fiscal and monetary reforms that the administration has started, which are aimed at providing enabling business environment, diversifying the revenue base of the economy, creating fiscal space for investment in critical infrastructure and ensure macroeconomic stability.”
In his remarks, Monday Onyeme, deputy Governor of Delta State, said that FAAC members are committed and dedicated to their duty and have been doing a wonderful job in enhancing revenue accruals or inflows into the Federation Account, which has benefited the three tiers of government.
This, according to him is especially true in the case of the oil producing states of the federation where several wrong computations are being corrected and refunds made.
Read also: Subsidy gulped N3.73trn as of May 2023 — NNPCL
He said, “there is still much work to be done in this direction, particularly on the payments of 13% derivation to oil producing states, since the coming into force of the Petroleum Industry Act (PIA).
“Since the implementation of the PIA a lot of concerns have been raised by stakeholders of this sector in respect of the new roles of the Nigeria National Petroleum Company Limited (NNPCL) as it effects inflows of revenue into the Federation Account.”
He maintained that the operation of the Federal Inland Revenue Service (FIRS) has been largely governed by the FIRS Act 2007, but with the introduction of the Finance Act of 2019, 2020 and 2021 and other responsibilities assigned to the Federal Inland Revenue Service he hopes that this retreat will enable stakeholders to obtain a better understanding of the operations of the FIRS in the light of the need for economic diversification.
“We must do away with the current practice of substituting long-term development strategies for short-term spending pressures, often out of political expediency, no magic formula to diversification,” he said.
What is needed according to him is to put the necessary policy and institutional framework that will facilitate the diversification of the revenue base by enhancing non-oil exports such as agricultural products, manufactured goods and services.
He noted that a lot is expected from the government State Fiscal Transparency Accountability and Sustainability for Results (SFTAS), the introduction of State Action on Business Enabling Reforms (SABER), the operation of the Nigeria Custom Service and many other initiatives/reforms will boost business activities and contribute positively to the nation’s revenue.
In his remarks, Ali Mohammed, the director of home finance of the Ministry said, “this year’s retreat is indeed apt and timely considering the myriad of economic challenges currently bedeviling our dear nation, as a result of over reliance on oil as the country’s major source of revenue.”
He explained that the retreat is a veritable platform that would avail members the opportunity to reflect over the past, discuss extensively on the nation’s current economic realities and brainstorm on ways to diversify Nigeria’s revenue base, with focus on mobilizing domestic revenue, eliminating wasteful spending, prioritizing expenditure and intensifying efforts in plugging revenue leakages.
He stated that to sustain the success recorded under the ‘State Fiscal Transparency Accountability and Sustainability’ initiative which is ending in December 2023 and ensure continued support to the states, the Federal Government in collaboration with the World Bank will soon commence the implementation of the State Action on Business Enabling Reforms (SABER), which would run from 2024 – 2026.
According to him, the approval of abridged external borrowing plan by the National Assembly is being awaited to usher in SABER effectiveness.
