Nigeria: NEDC Wants Increase in VAT Allocation Share, Ecological Fund From 3% to 5%

25 November 2021

Abuja — The North East Development Commission (NEDC), has canvassed for increase in its allocation from Value Added Tax (VAT) and Ecological Fund from three per cent to five per cent.

Managing Director and Chief Executive Officer (CEO) of the Commission, Mohammed Alkali, made the call Wednesday during the Commission's first consultative meeting with the North East Caucus of the National Assembly on the North-East Stabilization and Development Masterplan (NESDMP) Project, in Abuja.

The NEDC presently gets three per cent of VAT and Ecological Fund for its activities but the commission said the amount was grossly inadequate to develop the area.

Established in October 2017, the NEDC received a total budgetary allocation of N46,171,690,315 in the 2021 budget.

On the challenges confronting the intervention agency, Alkali said, "In terms of challenges, some are technical, while others are operational. As at today, with the support of some of your colleagues both in the National Assembly and the Executive, we are able to surmount these challenges and now we have access to the Value Added Tax and the Ecological Fund.

"But as they say, as you cross one challenge, another challenge might come up. The recent challenge is the agitation against how to distribute the VAT fund among the component states. If anything adverse happens to the status quo now, the Commission will be affected, because the Value Added Tax is one of the major sources of revenue that can be able to sustain the implementation of the master plan when it is ready.

"Our other cry is that we want the ratio to be increased from three per cent to five per cent, because at the end of the day, the quantum of amount we are going to look for is far in excess of what the VAT will provide. So, our demand is to see how the ratio can be increased."

Lead consultant to NEDC on the NESDMP, Dr. Mohammed Ahmad, also said the Commission would require over $9.6billion for the development of the North East region based on the assessment of the World Bank, European Union and the United Nations on amount required to fix infrastructural needs of the geopolitical zone as at 2016.

"There is no doubt about this. The budgetary provision will not be sufficient to address the challenges. In 2016, the World Bank, European Union and the United Nations did a rapid assessment of infrastructure damage in the Northeast and they came out with about $9.6billion of which about $6billion is in Borno State.

"So, even if we come up with this figure today, which was a figure as at 2016, I am not sure we have the internal resources," Ahmad said.

Earlier, Chairman of the North East Caucus of the National Assembly, Senator Danjuma Goje, said the interaction was to enable your caucus receive briefing from the commission on its activities, and also allow members of the caucus to make required input.

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