Foreign investments inflows into Nigeria climbed to $14bn in half year 2019, signalling upswing in investors' confidence, the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed has said.
In spite of this, she said Nigeria needed a lot of resources to actualize the ERGP and other development plans, which were at risk of being underfunded.
She disclosed this while speaking on a panel tagged "Strengthening Domestic Revenue Mobilization" at the ongoing 2019 World Bank/IMF meetings in Washington DC, USA.
"As a sign of increased investors' confidence in our economy, there were remarkable inflows of foreign capital in the second quarter of 2019. The total value of capital imported into Nigeria increased from $12 billion in the first half year of 2018 to $14 billion for the same period in 2019," she said.
On revenue performance, she said Nigeria has recorded year on year improvement on both revenue outturns and revenue to GDP ratio.
"Our revenue outturn as at December 2019 is 55 percent while it was 58 percent as at June 2019. Our revenue to GDP ratio on the other hand is 8 percent as at end of June 2019 while it was 5 percent as at December 2017," she said.
She noted that the infrastructure master plan requires about $3triillion over the next 30 years to sufficiently address our infrastructure deficit.
"To achieve all these, we need fiscal sufficiency and buoyancy, which must come through domestic revenues for it to be sustainable," she added.
On changing this trajectory, she said: "we have very low effective tax rates, archaic tax laws that are not evolving at commensurate pace with businesses, leakages in our revenue collection systems, low tax compliance rates and poor tax morale to mention a few. With numerous complex issues at hand, Nigeria must do things differently which requires robust, tough, well-coordinated and multi-faceted reforms."
She noted that "there are performance targets with consequences for non-performance including the members of the cabinet. For example, I have signed to deliver the 15% revenue to GDP in a performance contract and this will be cascaded down to Heads of revenue generating entities to have them aligned to our mission of turning around revenues."
She promised that the additional revenues will be used to fund health, education and infrastructure programmes. .
Additionally, she said "our proposals also raise the threshold for VAT registration to N25 million in turnover per annum, such that the revenue authorities can focus their compliance efforts on larger businesses thereby bringing relief for our Micro, Small and Medium-sized businesses."