Nigeria’s Revenue Falls To 5 Year Low

UN

Just when you think things are getting better for Nigeria, realities are showing otherwise. The official figure released by the government shows that the country’s revenue dropped to its lowest in five years.

Nigeria’s 36 states and the federal government shared a paltry NGN 299 billion (USD 1.5 billion) in the month of March. With this dismal revenue most states in the federation will find it difficult to pay their public workers let alone meet up with their loan obligations.

To make states find it easy, the federal government said it waived loan obligations for the month of March. In a statement by the finance ministry, the government said: “We are not able to guarantee that all states will be able to meet their salary obligations.”

Nigeria’s major challenge is its reliance on oil. The rally in the global oil market has made the country desperate to raise its revenue profile. President Muhammadu Buhari has started to create processes that will raise the revenue for the country. The Federal Inland Revenue Service, FIRS has already imposed stamp duty charges on all banking transactions. With a full year target of 3 trillion, the revenue agency plans to diversify the revenue profile for the country through more taxes and duties.

However, Nigeria government contributed to the increased volatility in the system through its indecisiveness and cold relationship between the executive and the federal parliament. The government has not yet signed into law its 2016 budget. Major businesses linked to government spending have either laid off thousands of staff or shut down operations.

The Naira, NGN has depreciated against the USD more than -200%. The country has been operating two markets for its beleaguered currency.

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