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The federal government is currently rethinking the 2020 budget to respond to the shocks stemming from ongoing global oil price crisis. The 2020 budget bench-marked crude oil price at $57/b but, as of now, the price is $38, could slide further. The crisis is triggered by the COVID-19 outbreak, which has affected demand from the world’s second-largest economy, China, and, of course, the associated price war by Saudi Arabia and Russia.
President Buhari’s body language beckons every revenue it can get. From the pose that upped the VAT rate to birth the Finance Bill, to the frown tightening the border, plus the wonderful “bata dance” with China for loans and, the unrelenting gulp of domestic loan via bonds.
The figures are being thrown around in news articles and broadcasts. Analysts have been telling of its consequences – the repeatedly depressing rates of unemployment and inflation, low GDP per capita, lean spending on building, maintenance and expansion of available infrastructure, all culminating in a youth restiveness and crime, extreme incidences of violent deaths, poorer standards of living, financial uncertainties and a general state of hopelessness. These are the negative consequences of a country on the brink of bankruptcy due to an unhinged appetite for loans and irresponsible use of same.
It is said that local and external debts are not altogether bad in themselves except they are used to fund unproductive investment or productive ventures that are not managed efficiently. Unfortunately, for a country as Nigeria, the exception is the case.
The Buhari administration has been struggling to meet its budgetary mandates as well as the President’s campaign promises to Nigeria throughout its first term. This explains why revenue-push policies predominate the Finance Bill that was passed yesterday. Yet, some believe the policies may suffer from poor implementation like many in the past. This is partly because the present tax regime is becoming increasingly aggressive and fiscally lopsided.
Nigeria’s economy bears semblance to the story of a boy who chose to be clothed in rags despite his enormous retinue of beautiful, carefully-tailored, and properly-fitted clothes. Since independence, Nigeria has had a series of properly thought economic plans which could have positioned it as one of the leading economies in the world.
The greatest joy of a mother lies in the ability to see her children grow up to become responsible adults who can generate enough income to take care of their needs. Little wonder a good mother always ensures to imbue her children with the necessary life skills that will prepare them to become independent individuals.
Since its inception in 2012, the National Sovereign Investment Authority (NSIA) has focused on enhancing the development of five key infrastructural sectors. They include; agriculture, healthcare, motorways, real estate and power. According to NETI’s recent report as of 2016, NSIA had made a capital contribution of $1,277, 653 in agriculture, N16,111,308 on the second Niger bridge and about N3,000,000,000 on Nigeria equity and shares. While the majority of its investments have been on agriculture, healthcare, motorways and real estate, no investment has been made in power infrastructure despite the strategic importance of power to Nigeria’s economy.
The Federal Government’s decision yesterday to increase the value added tax (VAT) rate from 5% to 7.2% is a polite way of saying to you “We the federal, state and local governments appreciate the money you pay to us every day through VAT, but we seriously need more from you to spend it for the usual things we spend it on. Will you help?”
In a recent interview, the Chairman of the Federal Inland Revenue Service, Tunde Fowler submitted that his administration with N5.3 trillion tax revenue in 2018, achieved the highest revenue collection in the history of Nigeria.
Demonstrations and protests from labour unions seeking an upward review of the N18,000 minimum wage yielded positive gains as President Muhammadu Buhari signed a new minimum wage of 30,000 naira for the workers in April.
