Fiscal discipline, plugging leakages, increased efficiency and accountability will make every Naira count
The Minister of Finance, Mrs. Kemi Adeosun has assured Nigerians that the Federal Government’s drive for enhanced revenue generation would not be a burden to Nigerians.
The Minister, who spoke at the opening of the two-day National Revenue Retreat 2016 in Kano, on Thursday, said the administration of President Mohammadu Buhari is firmly committed to turning this economy around by mobilising capital for investment in the essential infrastructure which will drive our economic growth.
The retreat titled “Enhancing Revenue Generation for Sustainable National Development”; according to the Minister was a very important gathering, which came up at a pivotal period in our nation’s economic history.
The Minister said the revenue focus will not burden Nigerians but will ensure that all revenue due to Nigeria’s government, irrespective of the source, is collected with a high degree of efficiency, fully receipted and properly accounted for.
The Kano State Governor, Alhaji Abdullahi Umar Ganduje, had in his speech disclosed that the state government had identified about 106 dormant revenue lines which it was working assiduously to activate.
However, Adeosun, in her remarks, said the Federal Government has also identified over 1000 dormant revenue lines, assuring however, that such huge dormant revenue opportunities will be maximised.
The Minister also expressed the determination of the Federal Government to work with the private sector where required in order to maximise the nation’s revenue potentials.
She said the days when revenue generating agencies acted as autonomous entities outside of the budget cannot be allowed to continue, saying whether the funds are from fees and fines, from taxes or from projects, the law is clear that every naira must be paid into the Consolidated Revenue Fund.
“The administration has started the process of maximising our revenues with a number of initiatives.
“The most important change introduced is a reorientation in the thinking about public money. Discipline and accountability in the spending of public money is a trademark of the President Buhari led administration. Making every naira count is a commitment and a policy focus and not a slogan. Citizens will not willingly pay revenues if the funds are seen to be leaking or being wasted.
“All spending must start with revenue and therefore we have commenced the work of plugging the leakages of government revenues. Such leakages can arise from a number of factors including inefficient collection systems, evasion of payments due, collusion and other malpractices, as well as obsolete tariffs. Mrs Adeosun also stated that “The first step required is the preparation of a detailed revenue map which identifies the specific lines of revenue and understands how such revenues are generated. Disaggregating revenue into line items is an important first step. The triggers in our various processes that result in a revenue transaction must be clearly understood and well documented. To maximise revenue collection, the task of plugging these leakages must be undertaken. It is also important to understand the costs of collection. That is the essential equipment, technology and resources that are required to support revenue. The administration is committed to ensuring budgetary provision for these costs.
“We currently hold daily bilateral revenue meetings with revenue generating agencies to define targets and agree strategies,” the minister stated.
She disclosed that the Federal Government has commenced the review and revision of the cost profiles of revenue generating agencies to ensure that maximum operating surpluses are declared and remitted in compliance with the Fiscal Responsibility Act. She said, “In this regard, we have recently commenced a number of audits of a range of agencies that will give us improved visibility into the revenue and cost profiles. This will enable us to generate an indicative cost profile that can be used to establish reasonable budget targets going forward.”
Revenue Mobilisation to complement borrowing for Investment in infrastructure
The Minister stated that need for investment in infrastructure is well documented as are the potential benefits from so doing. Given our low debt to GDP ratio, “we could have succumbed to the temptation to fund our needs purely by raising debt. However our approach to debt is a prudent one and we are firm believers in the critical role that revenue plays in mobilising funds. Thus the importance of today’s gathering in planning and developing attainable strategies for revenue mobilisation.”
She explained that revenue mobilisation provides a sustainable and predictable flow of funds that is not as vulnerable to external shocks as we have seen with the oil price. She added that the Ministry of Finance has committed itself to a Total Revenue focus, which will reengineer revenue collection, explaining that the focus of the event will be around preparing for the enhanced government revenue opportunities that will arise as Nigeria begins to recover.
Revenue generation and accountability are patriotic responsibilities of every public servant.
The Minister said the responsibility for revenue generation must be vested at the highest level within every organisation. Revenue is not the responsibility of the Finance Team, it is a collective and indeed a patriotic responsibility of every public servant. “The accounting officer must see themselves as the Chief Revenue Officers of the organisation. As we begin to streamline our public finances, we expect those organisations with high Revenue Generating Capacity to fulfil their responsibilities.
We have observed that in other countries some agencies like Passport Offices and Vehicle Licencing Centres, Airport Authorities and Ports are cash cows whereas in Nigeria their historical contribution has been sub optimal. This is going to change,’ the Minister stated.
According to her, “The focus of this conference is on non-oil revenue generation. The role of most of us, represented here, in oil revenue generation is minimal. Oil represents only 13% of GDP but contributes over 70% of government revenue. This cannot continue and as we move toward exploiting our solid minerals and agricultural endowments we must build robust revenue platforms to ensure that we take full advantage of the value opportunities.
“We must begin to see revenue maximisation as ‘The Business of Government’ that is government operating commercially where required and this will require a new mind-set. Optimisation of revenue generation requires targets, incentives and penalties as part of the performance management framework. Thus in some cases partnership and risk sharing with private sector operators must and will be considered.”
“The ease of doing business has been cited as one of the key drivers of economic growth and Nigeria has already set targets for improvement in this regard. Accordingly in our drive for revenue we must look for opportunities for co operations and synergy through the three tiers of government. Single collection of multiple levies must be pursued where possible to maximise the convenience and efficiency of our collections. The responsibility for collection of revenue must reflect the fact that there is ‘one Nigeria’ and there are no Federal, State or Local Government Nigerians.
There are just Nigerians and therefore we must have a collaborative approach rather than a confrontational approach. Where there is a need to review and update obsolete laws, this must be embraced by our Legislators.
“Nigeria can and must improve its revenue collection efforts. Our revenue to GDP ratio is far lower than that of our peers. Nigeria’s Tax to GDP is only 6% versus 26% in South Africa and 21% in Tunisia. This is actually good news as it reflects the opportunity for growth.”
The Minister charged participants “to take away concrete actions that you will begin to implement from Monday as part of the rebuilding of our public finances. Irrespective of your area of core responsibility, you must take full ownership of the need to maximise the revenue potential in your organisations, Treat government business as an enterprise to be operated with best practice and with the type of results that Nigeria needs and deserves at this critical time.”
