Minister of Finance, Kemi Adeosun
By Yinka Kolawole, with agency reports
LAGOS—Finance Minister, Mrs Kemi Adeosun, yesterday, attributed wastage of resources by state governments to non-compliance with tax payment by many Nigerians, especially at the state level.
Mrs. Adeosun, who made this known during a Facebook LIVE video chat tagged “Tax Thursday,” said many state governments get away with wastage and corruption because many Nigerians don’t contribute to resources at the state level.
Meanwhile, the Federal Government has disagreed with the International Monetary Fund, IMF, on the economic growth forecast for the nation in 2017. While the IMF projected that the nation’s economy will grow by 0.8 per cent, government expects a 2.2 per cent growth rate.
Adeosun, responding to questions during the tax programme monitored by an online news medium, Premium Times, said governments at the state levels will become more responsible when Nigerians hold them accountable.
She however, noted that the citizens will hold them accountable only when they pay their taxes, adding that such action is part of their duties.
“It is our duty; this is our national duty. People get very patriotic about Nigeria. Being a Nigerian is not about the flag, it is about doing the right thing,” she said.
She explained further that payment of taxes has a way of fighting corruption.
“I think as we get together, as people pay more taxes as well, it does fight corruption. The problem at the moment is this: In most state governments, there is no input from people where the state government gets its money from; so, they come to Abuja, get money and it goes back to the state.
“But when you in the state actually pay money to that state government, you would get involved. You would join the political party, when they call you for budget town hall, people would turn up; they would want to know what exactly the government is planning to do. “You’d get a lot more engagement from the public and that’s what keeps an eye on government; that’s what keeps an eye and checks corruption and checks wastage and makes sure that money is spent not on wasteful projects but on needful projects.”
The Finance Minister noted that such relationship between governments and tax payers alerts the people to the activities of government and creates vigilance on the part of tax payers.
“I think that partnership of tax payers and government is very critical. If government gets money it doesn’t need, it’s not accountable to the people for, it is very easy for that money to go astray.
“But when your money is there, then you make sure that really, people do the right thing. I think that’s very important – it is important for government and it is important for the people.”
FG, IMF differ on economic growth
The government made the projection in a document, sighted by Reuters, entitled, “2018-2020 Medium Term Fiscal Framework and Strategy Paper” which forms the basis for its 2018 budget, dated July 27.
In the document, the Federal Government projected growth of 2.2 per cent this year, 4.8 per cent in 2018, 4.5 per cent in 2019 and 7 per cent in 2020.
The government also projected the naira’s exchange rate to the dollar, which has traded at around N305 on the official market since 2016, to remain stable while inflation will decline but remain in double-digits at 12.42 per cent next year.
However, John Ashbourne, Africa economist at Capital Economics, seems to agree with the government position.
“I think that risks are to the downside rather than the upside, but 2.2 per cent isn’t outside the range of the possible now that oil prices and oil output are recovering,” he told Reuters.
It will be recalled, however, that IMF, had on Wednesday, said it expected Nigeria’s economy to grow by 0.8 per cent this year, with threats to growth remaining elevated.
It warned that threats to recovery remained elevated, noting that the economy will not grow enough to reduce unemployment and poverty.
“Near-term vulnerabilities and risks to economic recovery and macroeconomic and financial stability remain elevated. At 0.8 per cent, growth in 2017 will not be sufficient to make a dent in reducing unemployment and poverty. Concerns about delays in policy implementation, a reversal of favourable external market conditions, possible shortfalls in agricultural and oil production, additional fiscal pressures, continued market segmentation in a foreign exchange market that remains dependent on central bank interventions, and banking system fragilities represent the main risks to the outlook,” IMF stated.
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