Nigeria’s fiscal position worsened in the first four months of the year as the cost of repaying debt surpassed the government’s revenue in the first quarter of 2022.
According to details of the 2022 Fiscal Performance Report for January through April, total revenue stood at N1.63trillion while debt servicing stood at N1.94trillion, showing a variance of over N300billion.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, yesterday, warned that urgent action was needed to address the nation’s revenue challenge and expenditure efficiency at both the national and sub-national levels.
The report showed that gross oil and gas federation revenue for the first four months of the year was projected at N3.12trillion but as at April 30, only N1.23trillion was realised, representing a mere 39percent performance.
Despite higher oil prices, the report showed that oil revenue underperformed due to significant oil production shortfalls such as shut-ins resulting from pipeline vandalism and crude oil theft as well as high petrol subsidy cost due to higher landing costs of imported products.
However, non-oil taxes trailed targets marginally, with average performance of 92.6percent.
“Revenue performance is expected to improve in the second half of 2022 as a result of concerted efforts to address the oil theft and pipeline vandalism, the report said. It added that there is also seasonality to some of the non-oil taxes, which means that the nation expects to collect significantly more in the second half of the year.
“The improved revenue collection should also moderate the Debt Service to Revenue Ratio, which is currently above our target level,” the report said.
The expectation of improved revenue collection should also moderate the debt service to revenue ratio, which is currently above the nation’s target level.
In the first quarter of 2020, Nigeria’s debt service as a percentage of revenue rose to 99percent, according to the Medium-Term Expenditure Framework and Fiscal Strategy (MTEF/FSP) report released by the Federal Ministry of Finance, Budget, and National Planning.
The data showed that in Q1 2020, Nigeria incurred a total sum of N943.12billion in debt service while the Nigerian government retained revenue at N950.56billion.
In effect, Nigeria’s debt service to revenue was estimated to be 99percent during the period.
Yesterday, the new report showed that the Nigerian government’s share of oil revenues in Q1 2022 was N285.38billion (representing 39percent performance), while non-oil tax revenues totalled N632.56billion, representing 84percent.
In essence, the government generated N401.8billion from company income tax (CIT) and value-added tax (VAT) as CIT and VAT collections were N298.83billion and N102.97billion, respectively, representing 99percent and 98percent of their respective targets.
Customs collections (made up of import duties, excise and fees, as well as federation account special levies) trailed target by N76.77billion (25.42percent) while the other revenues amounted to N664.64billion, of which independent revenue was N394.09billion.
The report noted that for Nigeria, “fiscal risks are somewhat elevated”, following weaker-than-expected domestic economic performance and structural issues in the domestic economy.
It warned that revenue generation remains the major fiscal constraint of the nation and the systemic resource mobilisation problem has been compounded by recent economic recessions.
The underlying factors also include the Russia and Ukraine war, which the report said has assumed a new and worrisome dimension with severe implications on food and energy prices.
It listed the resurgence of COVID-19 in some major economies, which has led to slowdown in economic activities in those countries; as well as renewed elevated inflation in most economies, prompting monetary tightening in these economies with the inherent negative impact on capital inflow to emerging markets economies.
Also identified as a contributing factor is the challenging domestic macroeconomic and business environment and the negative impact of insecurity on the domestic economy.
“Efforts will, however, focus on improving tax administration and collection efficiency,” the report said.
“Crude oil production challenges and PMS subsidy deductions by NNPC constitute significant threat to the achievement of our revenue growth targets, as seen in the 2022 Performance up to April.
“Bold, decisive and urgent action is urgently required to address revenue underperformance and expenditure efficiency at national and sub-national levels.”
Nigeria To Observe Low Key Independence Day Anniversary -FG
Unlike those before it, Nigeria’s 63rd Independence Day observance will not feature a ceremony at the Eagle Square, Abuja, but will be held “low-key,” the Secretary to the Government of the Federation, George Akume, has disclosed.
Akume revealed this to State House Correspondents after he emerged from a closed-door meeting with Vice President Kashim Shettima, at the Aso Rock Villa, Abuja, on Wednesday.
He said October 1 would be “a time for reflections…to think very deeply as a people and the journey forward.”
The former Minister of Special Duties, who was reluctant to reveal details of the issues discussed, said it bordered on plans for the Independence Day.
“Independence is a historic event for any country and we Nigerians are no exemptions. c
“We are fully prepared for celebrations and for obvious reasons, it is going to be low-key and we are wishing Nigerians the best of luck and I want to assure them that better days are coming and pretty soon too,” he noted. c
On the modalities of this year’s edition, Akume said, “This is going to be low key; we are not going on fantastic jamboree at the Eagle Square and other locations.
“It’s a time for reflections…to think very deeply as a people. This journey is being charted by the captain of the ship.”
On what the government would do concerning the Labour Unions’ 21-day ultimatum that ended yesterday, he said, “Labour leaders are very patriotic Nigerians and we want to believe correctly that nobody will want to cause a strike.
“It’s not in the interest of the workers; it’s not in the interest of anybody because this government is very determined to ensure a good standard of living for Nigerians and to create prosperity for all.
“It’s not something that can be done overnight. This government came into being on May 29 and we have a tenure of four years. So, it will be inappropriate for us to begin to judge based on the few months we have spent in the office.”
The organised labour had on September 1 issued a 21-day ultimatum to the Federal Government over the delay in sharing palliatives, saying it might be compelled to declare an indefinite labour action if its demands were not met.
It said all is set for a total shutdown of the economy, which would start at the expiration of the ultimatum on Friday.
Among other demands, the Nigeria Labour Congress and the Trade Union Congress are asking for wage awards, implementation of palliatives, tax exemptions and allowances for the public sector workers and a review of the minimum wage.
Though the Federal Government committed to restructuring the framework for engagement with organised labour on palliatives, the eight-week timeframe set for the conclusion of the process expired in August with no action.
Work Begins On Eleme-Onne Road As FG Releases N33bn
Minister of Works, Senator David Umahi, has said that the Federal Government has committed N33billion to a giant construction company, RCC, to commence work on the Eleme-Onne section of the East-West Road in Rivers State.
Umahi, revealed this information during his inspection of the project and various other Federal Government initiatives within the state, yesterday.
Speaking from the Eleme-Onne road construction site, Umahi pointed out that President Bola Tinubu had tasked him with a working visit to evaluate the ongoing work.
He pointed out that this project gained significance after the president’s discussions with Rivers State Governor, Sir Siminalayi Fubara, and the Minister of Federal Capital Territory, Chief Nyesom Wike.
“This road from Eleme to Onne Port, the Rivers State people led by Governor Siminalayi Fubara and former governor Nyesom Wike led delegation to come and see the president.
“The president directed that I should immediately come here and ensure that work has started.
“The President has released N33billion for this project to RCC for them to start,” he said.
Justice Mary Odili Institute Trains Magistrates In Rivers
The Justice Mary Odili Institute has organised a training programme for the newly appointed magistrates in the Rivers State Judiciary for effective service delivery and enhanced performance.
The Institute was established by the State government in conjunction with the state Judiciary for the training and capacity-building of Judiciary workers across the state.
Speaking while declaring open the two-day capacity-building workshop /training with the theme “The Magistrates: Navigating The Path Of Justice,”the Chief Judge of Rivers State, Justice Simeon Chibuzor Amadi charged the newly appointed magistrates of Rivers State Judiciary to brace up to the challenges of their responsibilities and ensure that justice was served for all irrespective of their societal status .
He urged them to abide by the principles and doctrines of impartiality in law, stressing that respect for the law forms the bedrock on which the judicial system stands.
He stressed on the importance of training and capacity-building in job performance and urged them to take the two-day training seriously in order to deliver on their mandates.
Amadi described the roles performed by the magistrates in the administration of justice as pivotal and urged them to remain resolute in the discharge of their duties.
The CJ urged them to be committed to justice delivery and assured them that the newly built Magistrates Court would be put to use by next month.
The number one State Judicial officer further expressed optimism that the workshop would expose the newly appointed magistrates to divers perspectives and innovative approaches that would enhance their job delivery .
Earlier in her opening speech, the Administrator of Justice Mary Odili Judicial Institute, Justice Anwuri Ken-Chikwere emphasized the need to regularly train and empower the new magistrates on the rules of legal practice, even as she encouraged them to be committed to their job.
By: Akujobi Amadi
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