The Debt Management Office (DMO) has charged the Federal Government to bridge the deficit in the 2023 budget with improved revenue generation from taxes.
The DMO’s Director, Portfolio Management Department, Mr. Dele Afolabi, gave this charge at the Leadership and Development Policy Dialogue Series (LDPDS) organized in partnership with the African Centre for Leadership, Strategy, and Development Centre (Centre LSD) in Abuja.
He noted that despite being the largest economy in Africa, Nigeria had been operating a revenue-to-GPD ratio lower than many countries in the continent, noting that the revenues being generated have not been able to match the high debt service obligation of the country.
According to him, since improved revenues hold better promises for the government to fund the yearly budgets, there is a growing need for the Federal Government to explore more revenue sources to close the yearly budgets’ deficits.
The Director explained: “The people are not paying the right taxes, we don’t have the right culture of taxation and revenue for government. So, I think, looking at the next government, the key focus should be on how to grow government revenue.
“Most people don’t pay taxes, apart from people that receive salaries in the formal sector a lot of people are either not paying tax at all or not paying as they should; so there is a lot of leakages in terms of government revenue.
“If we have the highest GDP in Africa, then we should also have the highest revenue but that is not the situation”, he added.
Afolabi advised the government to reduce its dependence on crude oil revenues by developing other mineral resources and also block leakages in the revenue collection system as a strategic fiscal step of reducing borrowing to fund yearly budgets.
Commenting at the event, the Executive Director of Centre LSD, Mr. Monday Osasah, recalled that the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, said during the budget passage that this year the government would commit 60% of total revenue to debt servicing and described this as unhealthy for the nation’s development.
