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Tag: non-oil revenue

FG focuses on non-oil revenue to meet budget targets

The federal government is counting on non-oil revenue-generating agencies to meet its budgetary commitments, urging them to use technology to prevent financial leakages and waste.

Minister of Finance and Coordinating Minister of the Economy, Wale Edun, made this known in Abuja on Monday at the 5th National Treasury Workshop, organized by the Office of the Accountant General of the Federation.

The event, themed “Nigeria’s Revenue Challenges and the Way Forward: Exploring Non-Oil Alternatives,” focused on strategies for boosting government revenue outside the oil sector.

Represented by the Permanent Secretary in the Ministry of Finance, Lydia Jafiya Shehu, Edun emphasized the need for innovative solutions to increase revenue.

“In this year’s budget, about N14 trillion is for debt servicing. That is not the main issue—the real challenge is generating enough revenue,” he said. “The responsibility falls on non-oil revenue agencies. To achieve this, we must deploy information technology tools to eliminate leakages and waste.”

Read Also: Alaafin’s coronation in jeopardy over unknown whereabouts of Osun monarch

The Minister highlighted several sectors with significant revenue potential, including agriculture and agro-processing, solid minerals and mining, manufacturing, tourism, the digital economy, and improved tax collection. He stressed the importance of aggressively developing these industries to reduce dependence on oil revenues.

Edun acknowledged the challenges limiting revenue growth in non-oil sectors, such as poor infrastructure, high business costs, bureaucratic hurdles, regulatory inefficiencies, insecurity, low tax compliance, and widespread financial leakages.

“The government is already taking bold steps to address these issues through public financial management reforms, digitalizing revenue collection, and strengthening tax administration,” he assured.

The Minister described the workshop theme as timely, noting that the country must rethink its revenue generation strategies. He warned that relying on oil revenue is no longer sustainable due to global shifts in energy policies, declining oil demand, and fluctuating crude prices.

“We must adopt a diversified economic approach by tapping into non-oil sectors such as agriculture, solid minerals, manufacturing, tourism, the digital economy, and creative industries,” he stated.

Edun also commended the participation of key experts, including the Chairmen of the Federal Inland Revenue Service (FIRS) and the Presidential Committee on Fiscal Policy and Tax Reforms. Their presentations, he said, would provide valuable insights for shaping future government policies.

In her welcome address, the Accountant General of the Federation, Dr. Oluwatoyin Sikirat Madein, explained that the National Treasury Workshop serves as a platform for technocrats to discuss critical economic issues and propose solutions to boost national development.

She recalled that the last edition was held in November 2021 in Uyo, Akwa Ibom State, with the theme “COVID-19 and the Global Economy: Implications on the Nigerian National Treasury.”

The federal government’s renewed focus on non-oil revenue sources aligns with its broader strategy to create a stable and resilient economy by reducing dependence on oil and strengthening other key sectors.

February 17, 2025
Non-oil revenue has improved, says Accountant-General

The Account-General of the Federation, Oluwatoyin Madein, yesterday said non-oil revenue has improved significantly in the past few months.

Madein broke the news at the inaugural meeting of the House of Representatives Committee on Finance with Ministries, Departments and Agencies (MDAs) under the purview of the committee.

She, however, did not provide statistics to reflect this improvement.

Madein said: “The non-oil revenue has tremendously improved in the last few months which have been helping in the kind of inflows that comes to the federation account and we are also expecting them to do more and better likewise all other agencies.”

Read Also; Reps to pass 2024 budget before end of December

While responding to queries about why they were still carrying out their operations manually, the Accountant-General said her office would begin the automation of its processes by December.

She said: “Improving the revenue reconciliation is ongoing and it used to be manual, which makes it very tedious. We are working on having access to the systems. We are even having a series of systems of being deployed, revenue monitoring information system and also the reconslication system. They are working on them. We will expedite action to ensure those systems become operational before the end of the year. So that the reconciliation would be much easier than it used to be.”

On revenue leakages due to waivers and tax incentives among others, she said her office has no power to do anything about it.

She added: “On revenue leakages, when waivers, tax extension, tax incentives, are being posted at the Budget Office, they hardly refer to the Office of the Accountant-General. We do not even get involved in the process.”

It is when they make payment and the agency presents it side by side to explain how they come about the revenue that we would see whatever waivers that have been granted. So that leaves us with no other option but to accept the figures.”

The Chairman of the Committee, Hon James Faleke, said the committee will be addressing the revenue and fiscal aspects of the various MDAs through effective oversight and legislation on the fiscal policies that will provide effective revenue generation and economic development.

“Over the past four years, the House Committee on Finance has been at the center of this and we shall continue to do the same in our bid to shore up the revenue fortune of the nation,” he said.

October 18, 2023
IMF urges Nigeria to increase non-oil revenue

The International Monetary Fund (IMF) has advised Nigeria to explore ways of increasing its revenue outside its traditional base of oil proceeds.

The IMF’s Deputy Director, Fiscal Affairs Department, Paulo Mauro, who made the call at a press briefing at the on-going 2018 IMF/World Bank Meetings in Bali, Indonesia, admitted that there is an issue of how to increase Nigeria’s revenue base, pointing out that the matter was not only crucial, but of utmost priority.

Mauro, who was responding to a question on what strategy Nigeria should adopt to increase its revenue profile, said increasing the nation’s non-oil revenue was crucial, adding that way, more resources will be generated to fix infrastructure and attend to social spending.

”Indeed, we do see this – increasing non-oil revenues — as a crucial priority for the country. If one looks at the ratio of interest payments-to-revenues for Nigeria, that is quite high. And certainly, increasing revenues is the way in which one creates the space to do social spending, infrastructure, and other types of spending that benefit economic growth. So clearly, that is a priority.”

Stressing the need for increased revenue, Mauro also offered tips on how Nigeria could achieve the goal, saying the IMF has been discussing with the country some of the issues.

He said: “We have been discussing over the years with the government, and we see the priorities in tax administration, but there are also aspects of tax policy that would help. So, certainly, in the tax administration, to increase the compliance rate, something that could be done is to increase tax audits and to use e filing to a greater extent. There are data matching exercises that can be conducted.”

He called for strategies to curtail tax evasion and reduction in corrupt tendencies. ”So generally trying to reduce tax evasion and possibly corruption as well, those would be priorities on the tax administration side,” Mauro pointed out.

The IMF official said the Fund had earlier prompted the government to tinker with Excise taxes on tobacco and alcohol, a policy the government rolled out earlier, but which is under review.

“Stamp duties is something that can be looked at again,” Mauro said.

He said while efforts are on to increase revenue, attention should also be focused on how the proceeds are deployed. His words: “I think it is not just the revenue side; it is also the spending side. Clearly, improving the choices that one makes on which infrastructure projects, how does one go about selecting the ones that are really going to boost growth. So, I think, definitely, it is a priority to increase revenues, but also to be careful about the ways in which we can make spending more efficient,” he stated.

The Federal Government has stepped up its revenue generation through taxation.

The 2018 half year revenue performance report of the Federal Inland Revenue Service (FIRS) shows that tax revenue improved by 42 per cent.

The FIRS also said it had raised the tax-to-GDP contribution by 20 per cent.

On debts, the IMF’s Senior Communications Officer, in the Communication’s Department, Andreas Adrian, said there has been an increase in countries that issue debts in the international capital markets, including Sub-Saharan countries, a development he said was good for infrastructural financing, but nevertheless cautioned that it has its attendant consequences.

He said: “It is good for development to be able to participate in international capital markets to fund things like infrastructure projects and to sustain investment in countries.”

To Adrian, however, “international borrowing has to be balanced with stability objectives, and so countries have to make sure that the level of borrowing is sustainable in the long run so that the country can pay back the debt and the interest rates on the debt even if times get worse at some point”.

He said in the case of Nigeria, the rise in oil prices is sustaining economic activity, but oil exporter,” pointing out that oil prices could decline at some point, and so it is important to have some constraint on how much debt is issued.

“As a matter of fact, when you look at debt issuance of Sub-Saharan African countries, we do see a sharp slowdown in issuance in recent months. As financial conditions for emerging markets have tightened, financial conditions also have tightened for Sub-Saharan African countries, and there is some slowdown in the debt, and so it might be that we see less issuance going forward.

“Of course, there is going to be quite a bit of need for rollover of debt in 2020 through 2022 in particular. There is quite a bit of debt that is going to come due, so there will be rollover, and hopefully international capital markets will allow that rollover in a smooth fashion,” Adrian said.

October 11, 2018
2018 Budget: Saraki harps on increased non-oil revenue generation

The President of the Senate, Dr Bukola Saraki, has emphasised the need for government to increase non-oil revenue generation.

He made this known on Tuesday in Abuja when President Muhammadu Buhari presented the proposed N8.612 Trillion 2018 budget before a Joint Session of the National Assembly.

Saraki said that as the country gradually recovered from recession, it was important to reset the fundamentals that drove the economy so that it would not slide back into recession.

He added that “we must reassess the relationship between oil and our economy. Oil prices are gradually inching up, but that is no reason for complacency in our diversification drive.

“We must grow our economy away from oil and increase attention to other sources of revenue generation.”

He also stressed the need for emphasis on tax collection, saying other independent revenues from state-owned enterprises must be taken seriously.

Read: N8.612tr budget for 2018 will sustain steady economic recovery – Buhari

“If the budget is to be funded, we cannot afford to turn blind eye to revenue under-performance.

“While there is need to review extant laws guiding the operation of some government enterprises, I would call for more determined effort on the part of the executive, to block leakages.

“This sector alone accounts for over N40 trillion in valuation, of which less than N400 billion is remitted as revenue to Consolidated Federation Account. This is not acceptable. We need to vigorously address this area,” Saraki said.

The president of the senate commended President Muhammadu Buhari, the Economic Management Team, lawmakers, well as Nigerians, for working together to make the necessary sacrifices to get the economy out of recession.

He added that “`without doubt, this recovery benefitted from greater policy coordination, prioritisation and passage of economic reform bills, but more importantly, the resilience of the Nigerian people.”

He furthers said that the implementation of the 2018 budget and how it was implemented would be a defining element of the present administration.

“We must therefore continue to work together to steady the ship of this recovery.”

“Further to the area of increasing independent revenue, there is need to review agreements that government signed with some private sector service providers.

“Many of these agreements are biased, and clearly not in the interest of the country.

“We appreciate the need to spend, but we must ensure that our borrowing is targeted at productive projects that will stimulate the economy.

“We must also ensure real value-for-money in projects funded by borrowing and ensure that the projects are not overpriced.”

Saraki called for the submission of the 2018 budget to ensure consistency in government’s economic programmes and tax policies.

He said“ this bill, which should clearly detail the imposition, alteration or regulation of taxes such as the proposed tax on luxury items and excise taxes, among others, will put the financial proposals of government into effect.”

Read Also: Saraki, Dogara faults Osinbajo’s budget remark

November 7, 2017
Earnings from non-oil revenue rise by N24b

The monthly payout by the Federation Account Allocation Committee (FAAC) to the three tiers of government went up by N24 billion to hit N305 billion this month.

The increase was attributed to the marginal rise in non-oil revenue, particularly in companies’ income tax, a report by FBNQuest, an investment and research arm of FBN Holdings, said.

In a report titled: ‘A small pick-up in the FAAC payout’, the firm explained that though the revenue position is an improvement, the payout still falls short of the projected pro rata monthly average of N477 billion this year as the net distribution from the Federation Account and the Value Added Tax (VAT) pool combined is projected at N5.72 billion. The Federal Ministry of Finance announced after the FAAC meeting last week that the balance in the excess crude account stood at $2.26 billion. The crude oil price averaged $47.1/barrel last month, compared with $42.3/barrel the previous month.

Based on OPEC data, Nigeria’s crude oil production for last month averaged 1.4 million barrels per day (mbpd), 15 per cent lower than the previous month.

“However, data released by Windward, a maritime intelligence firm, revealed that Nigeria exported 1.89mbpd in May. It has been widely reported that vandalised pipelines in the Niger Delta have reduced production; we assume the higher export volume may be due to stored products,” the report said.

Continuing, it said the Federal Government decided to embark on another relief programme worth N90 billion for state governments which will be disbursed in two tranches, with an initial N50 billion released in three months and another N40 billion in nine months.

“This will be shared among qualified states at a 9% interest rate. Five states have completed the process to access this credit. The new forex policy brings a more market-oriented rate for the naira, compared with the previous CBN rate of N199/$1; as such this bodes well for all tiers of government as their share of naira revenues from the federation account will increase,” it said.

June 29, 2016
Reps walk out NCC, NDDC over non-remitance of non-oil revenue

Officials of the Nigerian Communications Commission (NCC) and the Niger Delta Development Commission (NDDC) were barred from a House of Representatives ad hoc committee hearing investigating alleged fraud in the remittance of generated non-oil revenue.

The officials of the two agencies were walked out due to the non-appearance of their chief executives.

The NCC was represented at the hearing by some officials led by the Director of Public Affairs, Anthony Ojobo, while the NDDC was represented by Executive Director of Finance, Henry Ogiri.

Other agencies at the public hearing included the Nigerian Television Authority (NTA), Federal Radio Corporation of Nigeria (FRCN) and the Nigerian Communications Satelite (NigComSat)Ltd.

The action of the committee was coming on the heels of a challenge thrown to House committees by the Speaker Yakubu Dogara at a retreat earlier Monday that the House is set to drive the change agenda of the government.

The panel, chaired by Chike Okafor (APC, Imo) said the non-appearance of the Executive Vice Chairman of NCC Prof Umar Garba Dambatta and NDDC Managing Director Bassey Dan-Abia was against the rules of the House.

According to him, engaging officials who cannot take responsibility for the actions of their agencies at the hearing would not serve the purpose of the investigation.

Okafor however said Dambatta and Dan-Abia must appear before the panel to respond to questions relating to their organizations on a date to be announced by the panel.

“We have to engage those that would not set us back because the mandate of the committee is critical to the economic realities on ground in this country.

“With a monolithic economy and the fact that we don’t have control of global oil market, with (Organization of Petroleum Exporting Countries (OPEC) setting its benchmark at $35, while we set ours at $38, the implication is that we are going to have issues with our budget proposal.

“That is why we have to look into non-oil revenue generation and we are looking at the past four years.

“We need to know what has transpired in that period concerning statutory and other sources of funds, interest paid on deposit accounts, banks used by the agencies concerned in terms of kinds of accounts, before Treasury Single Account (TSA), investment portfolios, offshore banks among others requests.

“If we are looking at all of these, we must have officers who can take responsibility for whatever is given to the committee.”

The submisions of NTA, FRCN and NigComSat were however taken by the Committee.

December 14, 2015
Fed Govt eyes N2.95tr non-oil revenue

The Federal Government is aiming to realise N2.95 trillion from non-oil revenue by the end of 2014, the Minister of Finance and Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, has said.

Mrs. Okonjo-Iweala, who made this known to State House correspondents at the end of the Federal Executive Council (FEC) meeting in Abuja, yesterday, explained that of the amount, the Federal Inland Revenue Service (FIRS) is expected to realise about N2.2trillion, while a foreign Consultant and an international tax firm, McKinsey & Co, will be saddled with the task of getting the additional N75billion, also from the non-oil sector.

To get the N75 billion, she said efforts would be intensified to get on the system those who have either been evading taxes, or paying less taxes than they ought to pay, adding that the consultant is expected to get 1.75 per cent Commission, averaging N470million if it is able to generate the additional N75 billion non-oil revenue.

She said: “The FIRS brought a memo seeking to strengthen non-oil tax collection and non-oil revenue collection. The drive that this administration is undertaking in terms of diversifying the economy seems to be yielding results. We need to expand our tax and revenue base to be able to do better.

“Nigeria’s tax to GDP ratio currently is relatively low at 7 per cent compared to other countries of the world. Our aim is to move from 7 percent to 22 per cent over time in the medium term. We are hoping over the next five years, the country will move gradually to this ratio. We want to do that through blocking all the loopholes and leakages in tax collection. That is why we resolved to find avenues to support the FIRS,” she added.

Mrs. Okonjo-Iweala pointed out that about 65 per cent of registered tax payers did not file returns in the past two years, while about 75 per cent of medium and small businesses currently in the tax system, were also not paying tax, adding that about 30 per cent of the companies operating under pioneer status abuse those incentives and evade tax.

She said the consultant has outlined seven steps to be taken by the FIRS to boost non-oil revenue, including improved audit, tax filing enforcement, review of tax holidays and exemption, tax arrears and debt enforcement, increased registration of companies and improved external communication.

She said the President’s anticipatory approval for the award of contract for the provision of technical support for non-oil revenue enhancement and capacity building services to the FIRS in favour of Messrs Mckinsey & Company for N1.470billion inclusive of all taxes equivalent to $8.750million with a completion period of 12 months, has been secured.

November 28, 2013