As oil-based revenue dwindles, the federal government of Nigeria has been counting on the non-oil sector to replenish the shortfalls. Though the revenue generated from the non-oil sector has significantly fallen short of what is required to meet government’s financial needs, it has been lauded by the finance minister Zainab Ahmed.
On Thursday, while presenting the finance ministry’s scorecard of 2015-2023, Ahmed disclosed that the non-oil sector accounted for 73 percent of the government’s revenue.
This received the minister’s applause as it underlines a major boost to President Muhammadu Buhari’s economic diversification policies.
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While appreciating the progress of the non-oil sector, Ahmed revealed that as part of its economic diversification plan, the federal government is ready to establish the Ministry of Finance Incorporated as an investment arm of the federal government.
“If the government is going to be in any business, the Ministry of Finance Incorporated is the investor standing on behalf of the government.
“Ministry of Finance Incorporated used to sit as a department in the treasury, but now we have the President’s approval to turn it into a world-class investment company. The Ministry of Finance Incorporated currently has 130 corporate entities and it has various investments in these entities,” she said.
This follows a similar move by the government to incorporate the country’s national petroleum company, the Nigerian National Petroleum Corporation (NNPC), as factored in the Petroleum Industry Act (PIA).
According to Ahmed, latest data shows that the non-oil sector had been contributing 30-35 percent to federal government revenue, but the figure had appreciated to 73 percent.
The federal government revenue shortfalls have been masterminded by the significant drop in oil revenue, which is as a result of oil theft and oil installation vandalism. But the minister said that crude oil production had moved up to 1.3 million barrels per day (mbpd), from a low of 800,000 bpd.
The minister also spoke about other fiscal policies geared toward economic growth, which include laws designed to enhance the current tax regime.
“We’ve introduced the annual finance acts which are the main fiscal instrument we use to carry out fiscal policy programmes and to amend fiscal laws that have either been problematic for businesses or unfair to businesses, or bring in more revenue to government.
“We’ve been able to enhance it among several tax laws and improve tax administration efficiency. We’ve also been able to increase taxes. For instance, the VAT increased from 5 per cent to 7.5 per cent. We’ve been able to reduce taxes for small businesses,” she said.