The federal government has set up a cabinet committee to come up with creative ways of raising additional revenues from both the oil sector and non-oil sectors as authorities desperately explore areas to fund the 2027 N7.298 trillion budget.
The report of the committee is expected to be presented to the National Assembly as they consider the budget upon resumption in the New Year, Minister of Budget and National Planning Udoma Udoma said during the budget breakdownMonday in Abuja.
Udoma said though the government cannot determine the price of crude oil in the coming year, it is determined to engage with the communities and people in the Niger Delta to minimize disruptions to oil production.
“We can introduce creative measures to improve on the efficiencies in that sector so as to increase government take. Indeed, a cabinet committee has been set up by President Muhammadu Buhari to come up with innovative and creative ways to raise additional revenues from the oil sector, and other sectors to support the funding of the 2017 budget.
The report of the committee, will be ready in time for the National Assembly to take this into account in considering the budget in the New Year, when they return from their Christmas recess” Udoma said.
The 2017 spending plan which was submitted by the to the National Assembly last week by the President is predicated on US $42.5/b with a target of 2.2million barrel per day.
Key assumptions as presented in the 2017 fiscal plan submitted by President Buhari shows an envisaged revenue of N4.94trillion with expected revenue from oil put at N1.985 trillion and N1.373 trillion from the non-oil sector. Contribution of oil revenue is put at 40.2 percent compared to the 19 percent in the 2016 spending plan, driven by the Joint Venture Cash cost reduction, higher price, exchange rate and additional oil related revenues.
“We must and we can, find the resources “ the minister said urging Nigerians to jettison thoughts that Nigeria could not find the resources to fund its own budget.
To raise more funds, government will challenge revenue generating agencies, particularly the Federal Inland Revenue Service and Customs to improve their efficiencies and broaden their reach so as to achieve the targets set for them in the 2017 budget.
“We will be issuing new guidelines and templates for computing the operation surpluses of the various government agencies so that we can achieve the targets we have set for independent revenues” Udoma added.
Nigeria slid into economic recession in the first quarter of 2016 and took a turn for the worse in the third quarter following negative growth of 2.24 percent, according to statistics by the National Bureau of Statistics (NBS).
The government’s revenues noose dived in 2015 and 2016 following drop in oil production instigated by militant activities in the Niger Delta as well as the drop in global oil prices.
Federal government’s oil revenues decreased sharply in 2015 and 2016 because of oil production shut-ins and sharp decline in oil price since 2014.
As a result, revenues realised for January to September 2016 was N2.2 trillion as against was N2.8 trillion targeted for the period.
The projected independent revenue was N1.1 trillion but N0.2 trillion was realised during the period.
Nigeria’s government in October launched an oil sector roadmap targeting a zero militancy rate by middle of 2017 to raise the production of oil to meet the country’s benchmark.
The Government also announced plans to issue new oil licences as part of efforts to explore new streams of revenues to fund the 2017 budget.