What measures has the ministry implemented to tackle the economic downturn and challenges in the sphere of public deficit?
The president launched the Economic Recovery and Growth Plan (ERGP) in April 2017 to articulate the administration's vision for the country and set out measures to get the economy onto a path of sustained, diversified, and inclusive growth. We target a growth rate of at least 7% by 2020. We have selected five areas for priority focus: stabilizing the macroeconomic environment, achieving agriculture and food security, ensuring energy sufficiency in power and petroleum products, improving transportation infrastructure, and driving industrialization and manufacturing by focusing on SMEs. With regard to the issue of the public deficit, when we came in as an administration we announced plans to immediately reflate the economy to reverse our deteriorating economic situation. Thus, we increased spending, particularly on capital projects. Achieving this at a time of declining revenues from crude oil meant we had to increase our level of borrowing and subsequently accept higher levels of public deficit. However, we have been careful to keep the deficit within prudent levels. Our fiscal deficit-to-GDP ratio is still well within the 3% maximum level allowed under the Fiscal Responsibility Act. Nevertheless, we are concerned by the rising levels of our debt-to-revenue ratios and are addressing this by seeking to raise our revenues.
How can Nigeria increase its revenues from other sources?
The first thing we are doing in terms of revenue is to make sure we at least maximize income from the oil sector. To this end, we have been engaging with the Niger Delta communities and states, managing to get production back to our goal of 2.2 million bpd. Second, we look at non-oil revenues from various surplus-generating government agencies. One of the measures we introduced was the Presidential Initiative on Continuous Audit (PICA) to identify and cut out wastage in public expenditure. We require such agencies to provide budgets to us, on time, which we closely scrutinize. We are also cleaning up the civil service payroll by linking the Integrated Payroll and Personnel Information System (IPPIS) to human resources systems and extending coverage of IPPIS to all ministries and departments of government. Third, we want to improve efficiencies in revenue collection with customs. Currently, our tax-to-GDP ratio is 6%, well below the average of 16% amongst our peers in Africa. We seek to raise the level of tax collection by widening our tax base, increasing the level of tax compliance, and improving the efficiency of tax collection. One of the recent initiatives we introduced to achieve this is the voluntary assets and income declaration scheme (VAIDS). This is an initiative to encourage voluntary disclosure of previously undisclosed assets and income for the payment of all outstanding tax liabilities with a waiver of any penalties, or sanctions for the prior incorrect declarations. Under this scheme, the Ministry of Finance has estimated that we could raise an additional USD1 billion in revenues. Finally, we intend to expand our manufacturing and agriculture, the solid minerals sectors, and the entertainment industry, including Nollywood, and the music industry. We support such industries through increased expenditure on infrastructure.
How can the country unleash the potential of its natural and human resources to build stronger institutional capacity?
A strong and efficient public sector is necessary to create the right environment for the private sector to flourish. Accordingly, we are taking steps to strengthen our public institutions and expand their capacity and effectiveness. To this end, we are completing a functional review of all MDAs to link government priorities, ministerial mandates, and individual job descriptions and performance targets. We are also implementing e-government across all government bodies, starting with a pilot scheme in selected MDAs. We want to dramatically increase the volume and variety of goods and services made in Nigeria and are addressing infrastructure and other challenges that impede agriculture and manufacturing.