Nigeria's low revenue generation capacity is the reason the country has not been able to take advantage of her reputation as Africa's largest economy and make wealth, Minister of Finance, Zainab Ahmed, has said.
The minister was speaking on Wednesday at the unveiling of the Federal Government's Strategic Revenue Growth Initiatives (SRGI) for sustainable revenue generation in Abuja.
The strategy, which covers all sectors of the economy, could help find solutions to the challenges successive administrations in the country have faced in generating enough revenue for the government.
"We have faced difficulty in mobilising domestic funds necessary for human capital development and infrastructure that are both drivers of sustainable economic growth," Mrs Ahmed said.
"Our current revenue-to-gross domestic product (GDP) ratio of about seven per cent is unsatisfactory and we are keen on exerting all efforts in turning this around," she added.
According to her, the case remains the same with the country's current contributions between oil and non-oil revenues to oil and non-oil GDP.
She said current government analysis showed oil revenue to oil GDP stood at about 39 per cent, while non-oil revenue to non-oil GDP stood at a paltry 4.2 per cent.
The minister said the country's Value Added Tax (VAT) revenue to GDP stands currently at 0.8 per cent, which compares unfavourably to the Economic Community of West African States (ECOWAS) average of 3.4 per cent.
Also, the country's revenue collection from excise duties is about 4.1 per cent, compared to Ghana's 15 per cent, and Kenya's at 19.5 per cent.
The minister said the first thematic area of the strategy is on achieving sustainable revenue generation, by optimally collecting revenues, and always maintaining fiscal buoyancy and resilience.
She said the other thematic area is identifying new revenue streams and enhancing the enforcement the law with regards to revenue collection on existing revenue streams.
"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, to turnaround the current performance on revenue outturn to meet revenue targets the country is charged with," she said.
"The revenue initiatives have been broken into clear implementable portfolios for each relevant MDA and I believe that these are well thought out initiatives targeted at improving our tax base and collections, ensuring we have big data to work with, deploy a single trade platform, among many others," the minister explained.
The minister, who chairs the initiative said a strong coordinating and governance unit will be deployed to monitor progress and results on revenue generation.
"From the ministry's end, a results framework has been designed and would be deployed by a strong coordinating and governance unit that will monitor progress and result 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."
Guided by the Nigeria Economic Recovery and Growth Plan (ERGP), some of the issues include enhancing oil and non-oil revenues; optimising capital and recurrent expenditures; the management of global and domestic fiscal risks; working with colleagues in other economic MDAs, to closely coordinate Nigeria's fiscal, macroeconomic, monetary and trade policies.
In addition, the minister said the focal issues include revenue enhancement through mobilisation of fiscal resources to deliver on socio-economic development targets as set out in the ERGP.
"These are based on the current fiscal terrain and recent revenue performance with the realisation of budgeted revenue at about 50 per cent as at the third quarter of 2018, which has a distance to transverse to achieve the ERGP's target of a tax to GDP ratio of about 15 per cent."
The permanent secretary in the ministry and Secretary, Presidential Initiative on Continuous Audit be (PICA), MK Dikwa, said the new revenue drive was one of the mechanisms to boost public confidence in the tax system. It would also deliver on governments priorities as it concerns the welfare of its citizens, grow the revenue system and ensure the full recovery of the country's stolen commonwealth.
"It is now left for us as reform drivers with the needed political will from the top, to steer the ship in the right direction and this requires a great deal of perseverance, commitment, dedication and discipline on our side to enable solutions that will be beneficial to our country."