Introduction and Background
Since I resumed duty as the Minister of Finance in September 2018, I have taken time to reflect and consider which issues would be
Among these focal issues, revenue enhancement has become a critical challenge in terms of the need to
This mandate is very critical and important and I intend to make it my priority. It also is the very reason we are all gathered here at this launch event.
Against this background, I would like to welcome you all to this very important launch of our Strategic Revenue Growth Initiatives, aimed at mobilizing domestic revenues and optimizing our approach to revenue generation.
The Problem Statement – Pervasive Low Revenue Generation Challenge
Nigeria’s low revenue generation capabilities
The case remains the same with our current contribution between oil & non-oil revenues to oil & non-oil GDP, for which our analysis on oil revenue to oil GDP reveals as 39% while non-oil revenue to non-oil GDP as 4.2%. Our VAT revenue to GDP in Nigeria for example stands at less than 1% (0.8%) which compares unfavourably to the ECOWAS average of 3.4%. So also, is our excise revenue which is 4.1%, compared to Ghana at 15.3% or Kenya at 19.5%.
The White Space for Revenue Generation via the Strategic Initiatives
These numbers indicate a white space to grow our revenues & improve our collections, so we can invest in the sustainable development of our country whilst maintaining a buoyant fiscal position.
Consequently, I tasked the Federal Ministry of Finance and some of its MDAs to identify what we can do to turnaround our revenue situation. Consequently, a lab process was initiated which was consultative and engaging- as we believe in a bottom up approach to identifying practical and impactful initiatives while also recognising the fact that expertise & institutional memory of revenue generation resides within the MDAs. As a complimentary endeavour to this, we worked with a global consulting outfit- Deloitte & Touché to bring a different perspective and insights on best practices into the process.
As an outcome of the lab, an extensive selection of
a. The first thematic area is on achieving sustainability revenue generation to optimally collect revenues, so we always maintain fiscal buoyancy & resilience.
b. The second thematic area is on identifying new revenue streams and enhancing the enforcement with regards to revenue collection on our existing revenue streams.
c. The third thematic area is targeted at achieving cohesion between revenue generating entities and equipping them with cutting-edge tools and expertise needed to support high performance, so we can turnaround our current performance on revenue outturn to meet revenue targets that we are charged with.
The revenue initiatives have been broken into clear implementable portfolios for each relevant MDA and I believe that these are well thought out initiatives targeting at improving our tax base & collections, ensuring we have big data to work with, deploy a single trade platform, among many others.
Expectation Setting: Strong Ownership, Accountability & Results Oriented Delivery
Based on this, I would like to mandate each MDA to own and implement their portfolio in a results-oriented manner. From our end here at the Ministry, we have designed a results framework & we will deploy a strong coordinating & governance unit that will monitor progress and results realisation, especially with regards to revenue generation. This is to ensure that the resources, time and efforts being used are productive and that the outcomes from the supporting Monitoring & Evaluation framework will guide executive decision-making as well as proposed reforms of the incentives provided for performance by our revenue collecting agencies.
Following this launch event, we will inaugurate a Steering Committee that I will Chair which will be tasked with monitoring progress and the impact of the revenue initiatives. Each MDA will be periodically reporting implementation progress and
Going Forward: There is a Strong Need for Change
The work we do here and going forward is critical; we have seen how risky it has been in the past to rely on volatile oil revenues that fluctuate depending on international energy markets and prevailing exchange rates. These are externalities that are not within our power to control as the Federal Government. This is why, in the ERGP, we have prioritized the generation and reporting of non-oil as well as oil revenues, to ensure a more sustainable revenue profile for the Federation.
In this vein, I urge all MDAs represented here to rise to the challenges inherent in achieving the revenue initiatives we are launching today, to make our contributions, as the Federal Ministry of Finance Group, towards a sustainable, inclusive and diversified economic development of our nation.
Indeed, the journey that we set forth will be a challenging one, but if we can succeed in our individual and collective endeavours, we can attain the stretch targets that come with these initiatives that we are adopting today for implementation.
Vote of Thanks
With this, I would like to thank the speakers, our Permanent Secretaries, the Agency Heads, Directors, Departmental Heads, and all other officers, for attending this as well as the previous events. I also wish to express my gratitude for the support from the Technical Team in terms of all the work & effort put into the lab process that led to this outcome. I would also like to thank everyone that has contributed in various ways and have taken time to participate in our process thus far. As we turn the page in our revenue strategy and move purposefully from planning our work to executing our priorities, I look forward to working with all of you and celebrating our success story in turning around revenue generation in Nigeria.
Most important of all, I would like to thank His Excellency, President Muhammadu Buhari; the Vice President, Professor Yemi Osinbajo; as well as all my colleagues in the Federal Government’s Cabinet, the Economic Management Team, and the National Economic Council, for all their support on the execution of my mandate.