Government initiates reforms to boost revenue

The Nigerian Government has introduced reform initiatives to boost internally generated revenue to fund the N7.30 trillion in the 2017 budget estimate.

The government expects N4.94 trillion as revenue in 2017 with N1.98 trillion coming from oil sector and N1.37 trillion from non-oil sector.

The Minister of Budget and National planning, Sen. Udoma Udoma, at the breakdown of the estimates on Monday in Abuja, said government would subject the joint venture operations to a new funding mechanism which would allow cost recovery.

According to him, additional oil-related revenue will include royalty recoveries, marginal field licences and early licencing renewals.

Udoma said that government would sustain the Treasury Single Account (TSA) to monitor financial activities of over 900 Ministries, Departments and Agencies (MDAs).

He said the government would also extend the Integrated Personnel Payroll Information System (IPPIS) to all MDAs in 2017.

The minister said government would broaden the tax base, improve effectiveness of revenue collecting agencies, improve tax compliance and reduce leakages by tracking trade mis-invoicing and introduce the single window to drive Customs efficiency.

He said government would improve the performance of its independent revenue by ensuring that all MDAs, particularly revenue-generating ones, presented their budget in advance and remitted their operating surplus as required by the Fiscal Responsibilities Act (FRA).

Udoma said the budget was premised on oil production of 2.2 million barrels per day at a bench mark of $42.5 per barrel and exchange rate of N305 per dollar.

He said the amount available for the budget would come from shares of oil revenue, dividends from the Nigeria Liquefied Natural Gas (NLNG), minerals and mining as well as non-oil such as VAT, Customs duty and Federal Account Levies.

The minister said that money was expected form independent revenues, unspent balance from the 2016 budget, signature bonus, recoveries and fines among others.

He said the 2017 estimate represented a 20.4 per cent increase from that of 2016 of N6.06 trillion with a provision for statutory transfer of N419.02 billion and N1.66 trillion for debt servicing.

Udoma said there was sinking fund of N177.46 trillion (representing 2.4 per cent) to retire certain maturing bonds, non-debt recurrent expenditure of N2.98 trillion (40.8%) and capital expenditure of N2.24 trillion (30.7%), inclusive of statutory transfers.

The minister said that the 2017 estimate had a deficit of N2.36 trillion, or 2.18 per cent of the Gross Domestic Product (GDP), but within the threshold of the stipulated FRA.

Accordingly, he said the deficit would be financed from external sources borrowing of N1.06 trillion, and domestic borrowing of N1.25 trillion.

A breakdown of the recurrent (non-debt) expenditure showed that personnel cost was allocated N1.86 trillion; overhead N229.81 billion; Amnesty programme N65 billion and refund to special account of N50 billion.

The four ministries with the largest recurrent allocations are Interior (N482.37 billion); Education (N398.01 billion); Defence (N325.87 billion); and Health (N252.86 billion) being about 70 per cent of the total due to their large personnel.

Udoma said many MDAs had yet to be captured in IPPIS and N2 billion provision was made to achieve the enrollment in the platform in 2017.

On Capital Allocation, he said it had 30 per cent of the budget with more than half of it (56 per cent) going to infrastructure development to stimulate economic recovery and growth.

Accordingly, Power, Works and Housing were allocated N229 billion; Transportation got N262 billion; Special Intervention programme got N150 billion; Defence N140 billion and Water resources N85 billion.

Others are Industry, Trade and Investment (N81 billion); Interior (N63 billion); Education (50 billion); Universal Basic Education Commission N92 billion and Health (N51 billion); Information and Culture got N41 billion as recurrent and N8.3 billion as capital.

The FCT got allocation of N37 billion; Agriculture got N91 billion; Niger Delta Ministry got N33 billion  while the Niger Delta Development Commission (NDDC) got N61 billion