By Omeiza Ajayi
ABUJA – The federal government has challenged the Federal Inland Revenue Service FIRS and the Nigerian Customs Service NCS to rev up their efforts at increased revenue generation if major projections in the 2017 budget are to be met.
Minister of Budget and National Planning, Senator Udoma Udo Udoma, who was speaking at the 2017 breakdown session said although certain developments affected the realization of projected government revenue last year, the administration is working hard to ensure increase in revenues to fund the 2017 budget.
“In terms of implementation of the Budget, we are making strenuous efforts to find the resources required. We are challenging our revenue generating agencies, particularly the (Federal Inland Revenue Service) FIRS and Customs, to improve their efficiencies and broaden their reach so as to achieve the targets set for them in the 2017 Budget”, he explained.
Udoma also said in spite of criticisms about government borrowings, the country’s fiscal deficit is still well within the three per cent (3%) limit and government is keeping very tight control on the size of the budget to make sure the fiscal deficit remains within the 3% threshold.
He said; “we are also engaging more extensively with the communities and people of the Niger Delta to minimize disruptions to oil production”.
Reviewing the 2016 Budget performance, Senator Udoma said there was reasonable progress on implementation and achievement of set targets even though aggregate revenues was less than projections, mainly due to disruptions in oil production in the Niger Delta region.
“As at year-end, FGN’s 2016 actual revenue was N2.95 trillion (76.4% of the N3.85 trillion budgeted). Oil revenue was N697.8 billion (97.2% of budget); Company Income Tax (CIT) and Value Added Tax (VAT) collections were N457.91 billion and 108.72 billion respectively, representing 52.8% and 54.8% of amounts budgeted; while Customs collections of N247.42 billion implied a 63.6% performance”, he explained.
The Minister explained that in designing the 2017 Budget, certain critical international factors that affect Nigeria as a country were considered, including the protracted period of lower oil prices, major macroeconomic realignments in China, increasing divergence in monetary policy in major economies, uncertain economic, political and institutional implications of BREXIT, weak demand in advanced economies and its spill-over effects; and geopolitical tensions in several countries.
On the domestic front also, the budget had to be designed at a critical time when the economy was experiencing contraction in growth (-2.06% in Q1 2016, now -0.52% in Q1 2017), insurgency and Insecurity parts of the North East, crude oil theft and pipeline vandalisation, foreign Exchange (FX) scarcity and Exchange rate tension.
External reserves were down to US$26.59 billion in May 2016 but now about US$30.28 billion, high Unemployment rate (from 13.9% as at Q3 2016 to 14.2% in Q4 2016), and inflation (18.55% as at December 2016, 16.25% as at May 2017), he added.
He explained that the 2017 Budget reflects “our fiscal plan to restore the economy to the path of sustainable and inclusive growth, the specific goals and targets of which are set out in the 2017 – 2020 Economic Recovery and Growth Plan (ERGP)”.
The Minister said the 2017 Budget is an infrastructure Budget and government takes transportation very seriously, which is why so much has been voted for roads and railways.
On the late passage of the last two national budgets, the Minister said in the months ahead, the Executive will work with the National Assembly to ensure that Nigeria returns to a predictable January – December fiscal year, with the budget signed into law ahead of the commencement of the fiscal year in the near future.
Also speaking at the event, the Director General of the Budget Office, Mr Ben Akabueze, said government is determined to bridge the gap between citizens and government by the measures being taken to promote greater transparency and accountability in the entire budget framework. “Our membership of the Open Government Partnership (OGP) has strengthened our resolve to enhance stronger citizen engagement and improved public service delivery”.