States yet to collect their balance of the Paris Club debts refunds would soon be paid, Supervising Minister of Finance, Mrs Zainab Ahmed, said on Thursday.
The Minister who disclosed this in Abuja during her quarterly briefing with journalists on activities of the Finance Ministry, said about N649.434 billion has been released for that purpose.
“For the final phase of the Paris Club debts refunds, the total sum of N649.434 billion was verified by the Ministry as outstanding balance to be paid to the State Governments,” the Minister said.
The amount to be paid is lower than about N691.560 billion Central Bank of Nigeria (CBN) paid as at March 2019 partly as a result of the exchange rate differential at the point of payment.
She assured that States with outstanding balances of the refund would be paid in due course.
‘Exit from recession’
According to the Minister, implementation of policies under Economic Recovery & Growth Plan (ERGP) led the economy to exit recession and currently on a path of sustainable, inclusive and diversified growth.
She, however, lamented the country’s “unsatisfactory revenue performance”, particularly in the non-oil sector, saying this has negatively impacted financing of critical sectors such as health, education, and infrastructure.
The Minister said the significant improvement in the country’s external reserves from $28.3 billion in 2015 to $44.69 billion as at May 13, 2019 has helped stabilise the currency exchange rates and economy.
On the role of domestic revenue mobilisation for continued economic success and inclusive growth in the country, Ahmed said time to act to accelerate all revenue initiatives is now.
She said she has accepted President Muhammadu Buhari’s call to action, by prioritising revenue generation, and strategic revenue growth initiatives and cost-cutting interventions aimed at boosting revenue performance.
On the progress recorded in the economy, the Minister said the country achieved “seven consecutive quarters of Gross Domestic Product (GDP) growth since exiting recession in the second quarter of 2017.”
“As at Q4 2018, the economy grew by 2.38 per cent in real terms (year-on-year), representing an increase of 0.27 per cent compared to Q4 2017 and, a rise of 0.55 per cent, compared with the growth rate in Q3 2018.
“Overall, GDP grew at an annual rate of 1.93 per cent in 2018 compared with 0.82 per cen in 2017, representing an overall increase of 1.11 per cent year on year,” she said.
In 2018, she said the country’s budgeted revenue was about N7.2 trillion, against the realised figure of N3.96 trillion, signifying a negative variance of 45 per cent.
Despite the shortfall, she said the government “was able to fully pay workers’ salaries and service its debts 100 per cent.”
On capital releases, the Minister said, as at May 14, 2019, “seven months overhead was released for 2018, two months for 2019, and N2.079 trillion capital expenditure.”
“We have adopted a prudent debt management strategy which ensures we invest what we borrow in capital projects. Although our debt by international standards, at 19.09 per cent Nigeria’s debt to GDP ratio, is well below the threshold of 56 per cent for countries similar to Nigeria. The government is addressing the issue of reducing the debt service to revenue through a combination of debt substitution strategies.”
On ongoing reforms by her Ministry at Federal Inland Revenue Services (FIRS) and Joint Tax Board (JTB), she said the country’s taxpayer database has been expanded to 35 million from nine million in the four years of the Buhari-led administration.
She said this figure is expected to grow to 45 million individual and corporate payers when the ongoing integration of different biometric databases is completed.
“Through reforms at FIRS and JTB, we have been able to harmonise Tax Identity Number (TIN) database to cover Federal, States and Local Governments to establish a unified identity number system for uniquely identifying tax payers,” she said.