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Capital importation is foreign investments into a nation’s economy and is necessary for economic growth as it enables rapid investment. They are made up of three categories — Portfolio Investment, Foreign Direct Investment (FDI), and Other Investments.
In 2020, Nigeria generated a total of ₦1.41 trillion as revenue from Company Income Tax (CIT). Of this figure, 56.09% came from the sectoral collection, 16.89% was e-payments, and 27.02% from foreign sources.
Nigeria’s Finance Minister, Zainab Ahmed, in 2019 acknowledged the country had a revenue problem. Mrs Ahmed made the comment while defending the 2020 budget before the National Assembly, where she sought approval for a loan to finance a ₦4.97 trillion deficit in the budget.
The National Assembly has increased the 2021 budget by an extra ₦549bn, with the National Social Investment Programmes take 66% of the increment;
There has been increasing demands for revenue diversification measures due to the fluctuations in revenue earning from Nigeria’s crude. An analysis of Nigeria’s earnings from the top traded items for the first quarters of 2017, 2018, and 2019 has indicated the huge potentials of some non-oil sectors.
The Nigeria National Petroleum Corporation (NNPC) recently announced the resumption of 1,000 graduate trainees. While the new hires resumed virtually, this signals increased overheads for the state-owned enterprise. With refineries that have not made profits in the last eight years, it is argued that many NNPC staff are earning salaries without doing anything. By implication, the new hires may end up having little or nothing to do and thus keep up with the existing redundancy at the NNPC.
For Today’s Numbers to Ponder, Nigeria witnesses 1.87% economic growth, amidst the global pandemic and crude oil price slash. In the same vein, the country’s export cashbook recorded N4.75tn as export revenue. Between 2015 and 2019, the Nigerian government budgeted N464m for eight human-related clinical trials of locally produced drugs. Moreso, it has also approved 10 billion naira worth of loans and grants to various groups to conduct for healthcare-related research.
There is a massive drop in oil earnings by 80 percent and the Nigerian government is struggling to secure proceeds from crude sales. It is clear from reports that Nigeria’s economy is bound for recession. Already, the GDP is expected to drop by 8 percent in 2020.
About a fortnight ago a correspondence from the Federal Inland Revenue Services (FIRS) notified business owners on the modalities for payment of monthly tax returns (VAT). The correspondence directed that due to the COVID-19 lockdown, business owners should utilize the e-payment platform for tax payment. Also, in compliance to social distancing measures, business owners were directed to send a copy of the electronically generated bank invoice to a designated e-mail address against the usual physical submission of payment evidence to the tax office. However, many business owners consider the absence of tax breaks, an additional burden associated with the pandemic.
