Nigeria needs more than oil revenue to finance 2021 budget  ― RMAFC

A member of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Alhaji Abdullahi Yaman, has said that earnings from oil alone cannot sustain the nation’s 2021 budget.

Speaking with journalists in Ilorin on Tuesday, Alhaji Yaman, who decried Nigeria’s dependence on oil revenue to cater for over 200 million population, said that the novel COVID-19 pandemic will also affect the financing of the 2021 budget.

“With or without COVID-19 pandemic, there are certain structural issues affecting the Nigerian economy. Nigeria has a population of 200 million people, at least that is what many agreed on. We all depend on one product as the sustainer of our economy. Here, it is only oil. So, if there is anything that affects oil, it affects the economy.

“Before the COVID-19 pandemic, oil prices have started plummeting. At a point in time, we were selling our oil at $100 per barrel. All the effect of COVID-19 further forced it down to about $50, almost half. What this tells you is that the revenue stream of government was almost halved.

“The effect of that is that the money that would have been available for the economy to aspire in the environment that was required has not been there. In all this and more importantly as a country we have not been able to pay what is the adequate contributions to government.

ALSO READ: One killed, arms stolen as armed men attack Igueben police station

“Government revenue is so small. In Africa, Nigeria is the lowest in terms of tax to GDP ratio. Nigeria has only six per cent. Countries like Ghana, South Africa, even Rwanda that has just risen from genocide, has about 20 per cent. What this means is the revenue contribution of an individual in relations to GDP. But because a lot of us are outside the tax net, and do not pay, the country suffers.

“Now with COVID- 19, the most industrialized countries stopped working. There was a lockdown. So the demand for our oil went to an abysmal low. With that, the little that was coming almost stopped. At a point, we had so many of our ships floating on the high seas with nobody to buy them,” he said.

Alhaji Yaman advised the government to intensify efforts on economy diversification programmes, warning that oil is an exhaustive commodity.

“The whole world is taking steps back from fossil fuels. In China, for example, one of the highest buyers of fuel is saying by 2024, they do not want to have petroleum-fueled cars anymore. They are thinking of electric cars. It’s what is in vogue now, nobody thinks of oil in the long term now. Currently, oil has fallen to as low as $40. So who will buy our oil now? We’re not producing enough because people are not buying. The ones we are producing, we are not getting more than 40 per cent of its value. So, the revenue of the government is very small,” he said.

_{NIGERIAN TRIBUNE}