The Minister of Budget and National Planning, Udoma Udoma, on Tuesday revealed the strategies the federal government plans to adopt in funding the 2018 budget.
Recall that President Muhammadu Buhari had last week presented N8.6 trillion ‘Budget of Consolidation,’ proposal to a joint session of the National Assembly for approval for the 2018 fiscal year.
Presenting the budget details on Tuesday, Udoma said the government realised that inadequate revenue was the greatest challenge it was facing in its effort to deliver service to the people.
“Government’s focus is to maximize the use of revenues from the oil sector and spend in the non-oil sector, to get the non-oil sector driving the economy. Once government revenue is up, the debt service ratio to the GDP would come down. More money would become available for infrastructure to better the life of the people,” the minister said.
“Oil is a wasting asset. This is the time to maximize our revenues from oil and spend them in the non-oil sector.
“That is basically the strategy of the ERGP (Economic Recovery & Growth Plan) and government’s plan in the 2018 budget,” he said.
Other strategies to boost revenue, he said, include deployment of new technology to improve revenue collections; encourage tighter performance on management of fiscal framework for state-owned enterprises, and stronger enforcement action against tax defaulters.
“Apart from the tax amnesty programme by the Federal Inland Revenue Service, FIRS, to encourage voluntary payment of tax by Nigerians, the minister said government has adopted other key reform policies to realize its revenue target.
“They include new funding mechanisms for joint venture operations in the oil and gas industry to allow for cost recovery in lieu of cash call payments, which constrained new investment in the oil sector”, he added.
Reviewing the 2017 budget performance, Mr. Udoma said revenues performed at almost set targets, with oil revenue averaging N1.6 trillion from the N1.9 trillion target as at the end of the third quarter of the year.
“Government, through the Ministry of Finance, is looking at the possibility of carrying out an amendment of the Fiscal Responsibility Act, FRA, to ensure that they remitted the percentage of their revenue surplus, as required by law. Government is determined to work harder to achieve its revenue targets in 2018,” Mr. Udoma said.