The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, on Monday disclosed that the Federation Account had been recording 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.
Edun made this disclosure at the opening ceremony of a two-day retreat for Federal Account Allocation Committee (FAAC) organized by the Federal Ministry of Finance in collaboration with Delta State Government, with the theme “Creating Resilient Economy through Diversification of the Nation’s Revenue” in Asaba, Delta State.
Represented at the forum by the Permanent Secretary of the Ministry, Okokon Ekanem Udo, the minister pointed out that the improved fiscal performance was directly related to the current reforms of the President Bola Tinubu-led administration.
According to him, the retreat’s theme aligns with the new administration’s directive on the domestication of revenue mobilization.
The Minister said that the economic reforms of the administration since its inception in May 2023 clearly outlined right steps to transformation of the country’s economy, adding that in less than six months, the administration had introduced petroleum subsidy removal, fiscal and other monetary policy 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.
Edun noted that the reforms had continued to be applauded not only by the experts locally but also globally, including the International Development Partners such as the International Monetary Fund and the World Bank among others, describing the measures as what Nigeria needs right now to address her lingering socio-economic challenges.
He explained that government was not oblivious of the hardships faced by Nigerians following the removal of petroleum subsidy and harmonisation of exchange rate, assuring 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”.
While commending the Delta State Government for hosting the forum, the minister said: “I am optimistic that the retreat will leverage on the conducive environment of the good people and government of Delta State to optimize the achievements of the retreat’s objectives.
“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”, he added.
Earlier, the Delta State Governor, Mr. Sheriff Oborevwori, who was represented by the Deputy Governor, Monday Onyeme, in his keynote address said that FAAC members were 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.
According to him, this is especially true in the case of the oil producing states of the federation where several wrong computations are being corrected and refunds made.
He pointed out that “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)”.
The governor added that since the commencement of the implementation of the PIA a lot of concerns had been raised by stakeholders in respect of the new roles of the Nigeria National Petroleum Company Limited (NNPCL) as it effects inflows of revenue into the Federation Account, expressing the hope that this retreat will address these concerns and lay them to rest permanently.
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.
The Governor advised that “We must do away with the current practice of substituting long-term development strategies for short-term spending pressures, often out of political expediency”, adding that” no magic formula to diversification”. 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.
Oborevwori emphasized that economic diversification must move beyond rhetoric, adding that, concrete, measurable steps need to be taken now to facilitate non-oil exports, expand the revenue base, and make economic diversification a reality.
The Permanent Secretary of the Ministry of Finance, Okokon Ekanem Udo, who was represented by the ministry’s Director Home Finance, Ali Mohammed in his welcome address said that this year’s retreat was apt and timely considering the myriad of the nation’s current economic challenges due to over reliance on oil as the country’s major source of revenue.
He explained that the retreat was a veritable forum that gives participants 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 maintained that the timing of the retreat would enable FAAC realize its full objective of on-boarding the new Commissioners of Finance and robbing of minds on pertinent issues bearing on prudent financial management in particular and the economy at large, as well as create ample room for social interaction in a more relaxed atmosphere.
The Permanent Secretary further disclosed that the State Fiscal Transparency Accountability and Sustainability for Results programme would end in December 2023, adding that to sustain the success recorded under the initiative and ensure continued support to the states, the Federal Government, in collaboration with the World Bank, would soon commence the implementation of the State Action on Business Enabling Reforms (SABER), which would run from 2024 – 2026.
He clarified: “Currently, the approval of abridged External Borrowing Plan by the National Assembly is being awaited to usher in SABER effectiveness. He concluded by saying “We have one county, let us work together to minimize waste, enhance domestic revenue mobilisation and optimize the utilization of resources to ensure the wellbeing of all Nigerians.”
