Nigeria is now earning more revenue from non-oil sources and it is a good news, at least for a battered economy in recession.
In the just released data from the Federation Accounts Allocation Committee, FAAC the federal government earned NGN301.32 billion more in June. The government revenue sharing among 36 states has now reached NGN559.03 billion for the month of June.
The Minister of Finance, Kemi Adeosun said:
“The big cause of the increase is the improvement of non-oil revenue from the FIRS. The FIRS improved its performance between last month and this month by NGN165 billion. And that accounted for the change in revenue; and also, there was an improvement of NGN12.6 billion by the Nigeria Customs Service, as well as the exchange rate gain of NGN79.2 billion
“This is a significant improved performance, especially by the Customs that was able to do so despite the scarcity of foreign exchange and the restrictions on the 41 items. So, we are quite encouraged by that because it means that some of the reforms that we have started around collection improvement are beginning to bear fruit” she added.
However, monitoring the growth trend, Adeosun said “The gross statutory revenue of NGN538.78bn received was higher than the NGN237.46bn received in the previous month by NGN301.32 billion. The average price of crude oil increases from $32.26 in February to USD38.64 million in March, resulting in USD92.99 million increase in federation export revenue.”
Nigeria’s tax collection system is seeing improvement, however, the tax net is not wide enough. The country only has 10 million people paying income tax compared to over 70 million ‘working’ population.
The increase in revenue allocation is also a ‘sigh of relief’ to states many of whom have not paid salaries for several months. While the viability of many states has been argued from various angles, there is the need for states to seek financial independence as the federal government continues to witness volatility in its earning futures.
Moreover, Nigeria’s revenue should have gone beyond this milestone if its negotiations with militant groups in the oil rich Nigeria Delta has yielded a sustainable calm. The faster talks can be concluded the better for Nigeria’s economy that is officially in recession.