In light of Nigeria’s dwindling revenue, the continued payment of trillions of naira on fuel subsidy by the government and the attendant economic challenges, the World Bank on Wednesday raised the alarm that the country might be facing an existential threat.

The international financial institution warned that if the country failed to optimise its tax system and focus on other areas to boost its revenue, the already low revenue would continue to drop. It noted that despite the rise in the price of oil in the international market, Nigeria had not reaped the benefits because of the huge amount spent on fuel subsidy.

The Senior Public Sector Specialist, Domestic Resource Mobilisation, at the World Bank, Mr Rajul Awasthi, said these at a virtual pre-summit, with the theme ‘Critical Tax Reforms for Shared Prosperity’, organised by the Nigerian Economic Summit Group on Wednesday. He insisted Nigeria would have to eliminate the subsidy regime eventually.

After the Federal Government earmarked about N4tn for subsidy payment in 2022, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, said recently that government might spend a whopping N6.72tn as fuel subsidy in 2023 or pay N3.36tn up to mid-2023 if the subsidy regime would was to end in May 2023.

Also, the minister had consistently said the nation was battling with revenue problems, which had compelled the government to keep borrowing. The debt stock had risen to N41.6tn in the first quarter of 2022 with projections that it could peak at N45tn by the end of the year. Nigeria is rated the fifth on the list of the World Bank’s debtors, with $11.7bn debt stock as of June 30, 2021.

The International Monetary Fund had in March projected that Nigeria might spend 93 per cent of its revenue on debt servicing in 2022, but the minister disclosed a few weeks ago that about 119 per cent of the country’s revenue was spent on debt servicing. This implied that government had to borrow to meet its debt financing obligations, a development many economists had described as disturbing and unsustainable.

The virtual event, anchored by the PwC’s Fiscal Policy Partner and Thematic Lead, NESG Fiscal Policy and Planning Thematic Group, Mr Taiwo Oyedele, was attended by several stakeholders, including the representative of the Manufacturers Association of Nigeria and the Executive Secretary of the Joint Tax Board, Mrs Nana-Aisha Obomeghie.

Meanwhile, in a slide he shared during his presentation, which showed Nigeria’s Development Update, Awasthi explained that between 2015 and 2019, Nigeria’s non-oil revenues were among the lowest in the world and as a result the second lowest in spending, and that oil revenues were also falling even when oil prices were higher.

He stated, “Nigeria has the largest economy in Africa and the largest country in Africa by population, so it is critical to Africa’s progress. There is no doubt about that. But the government of Nigeria, from the public finance perspective, is really facing an existential threat. Let’s not downplay the situation. That is the actual reality.

.The international financial institution warned that if the country failed to optimise its tax system and focus on other areas to boost its revenue, the already low revenue would continue to drop

malel1:
If my south west brodas listened to us 2015 , these things wouldn’t have happened

ImperialYoruba:


Tinubu already issued same advisory to government very recently.

Tinubu continues to highlight risk areas and advise on policies that global institutions agree with and back.

Tinubu uplifted Lagos economy, Obi sank Anambra economy.

Vote success
Vote credibility
Vote competence

ImperialYoruba:


Tinubu already issued same advisory to government very recently.

Tinubu continues to highlight risk areas and advise on policies that global institutions agree with and back.

Tinubu uplifted Lagos economy, Obi sank Anambra economy.

Vote success
Vote credibility
Vote competence

Mokason288:
BUhari told us that there was nothing like subsidy

He has never heard that word.... now his government is paying 4trilion on subsidy that he has already removed twice

tadlel:
Tinubu is a PLACE HOLDER for gov Shettima, the earlier you people realize this the better oo.

Most of this people pushing this Drug Lord doesn't know there's an agenda to just install him by fire by force and when he is tired and sick before 2 years, Shettima will be swear in as president and more kabiru sokoto will be hiding in his house.

Even Yaradua was way stronger than him before he became president

Affliction shall not rise the second time

ImperialYoruba:


Tinubu already issued same advisory to government very recently.

Tinubu continues to highlight risk areas and advise on policies that global institutions agree with and back.

Tinubu uplifted Lagos economy, Obi sank Anambra economy.

Vote success
Vote credibility
Vote competence

yinkus6750:
We are presently living beyond our means.
The present regime has no strong financial and economic experts.
From Emefieke, to minister of finance, budget planning, are all clueless.
Increasing debt profile after depleting all reserves.
We are plunging into something worst than recession.
The next government has a lot to do.
That's why we must be very Obidient in our Civic responsibility by 2023

tadlel:
Tinubu is a PLACE HOLDER for gov Shettima, the earlier you people realize this the better oo.

Most of this people pushing this Drug Lord doesn't know there's an agenda to just install him by fire by force and when he is tired and sick before 2 years, Shettima will be swear in as president and more kabiru sokoto will be hiding in his house.

Even Yaradua was way stronger than him before he became president

Affliction shall not rise the second time