Stop Sharing Oil Money - IMF Boss Advises Nigerian Government

Christine Lagarde, head of the International Monetary Fund, IMF on Wednesday told the National Assembly that the days of sharing oil revenue were over. Speaking to the Leadership of the National Assembly, she said, “I see an immediate priority – a fundamental change in the way government operates. What do I mean by that? The new reality of low oil prices and low oil revenues means that the fiscal challenge facing government is no longer about how to divide the proceeds of Nigeria’s oil wealth, but what needs to be done so that Nigeria can deliver to its people the public services they deserve – be it in education, health or infrastructure”. “This means that hard decisions will need to be taken on revenue, expenditure, debt, and investment going forward. My policy refrain is this: “Act with resolve- by stepping up revenue mobilisation. The first step is to broaden the tax base and reduce leakages by improving compliance and enhancing collection efficiency. At the same time, public finances can be bolstered further to meet the huge expenditure needs. For example, the current VAT rate is among the lowest in the world and well below the rates in other Economic Community of West African States (ECOWAS) members – so some increase should be considered.”

“Nigeria’s debt is relatively low at about 12 per cent of Gross Domestic Product (GDP). But it weighs heavily on the public purse. Already, about 35 kobo of every naira collected by the Federal Government is used to service outstanding public debt”. “Exercise restraint- by focusing on the quality and efficiency of every naira spent. This is critically important. As more people pay taxes there will, rightly, be increasing pressure to demonstrate that those tax payments are producing improvements in public service delivery.”