Stop mounting pressure on agencies to meet revenue targets, LCCI urges FG

THE Lagos Chamber of Commerce and Industry (LCCI) has urged the federal government to stop putting severe pressure on its agencies to meet expected revenue targets.

The chamber said such pressure had distracted several revenue-generating agencies from fulfilling their core mandates.

In a January press statement sent to The ICIR, Toki Mabogunje, president of the LCCI, said emphasis on revenue generation often propelled agencies to focus solely on revenue to the detriment of their core mandates of facilitating investment growth, which, in turn, hurt ease of doing business in the country.

Findings show that the Nigerian government is cash-strapped as crude oil prices nosedive. Ben  Akabueze, head of the Budget Office, said in May 2020 that the country’s oil revenue had fallen by 80 percent in the previous five years. The situation has forced federal, state and local governments to scavenge for revenue to meet obligations.

The LCCI has severally criticised the federal government for focusing on revenue mobilisation for agencies such as the the Nigerian Customs Service (NCS), the Standards Organisation of Nigeria (SON), the Federal Inland Revenue Service (FIRS), among others, stressing that they should rather be facilitating trade.

Checks show that the 2020 budget has a total spending plan of 13.59 trillion naira, with a revenue projection of 7.99 trillion naira.

Aggregate expenditure comprises N5.99 trillion naira for recurrent non-debt expenditure; 4.37 trillion naira for capital expenditure; 3.32 trillion naira for debt servicing and 496.5 billion naira for statutory transfer, with non-oil and oil revenue sources contributing 70 percent and 30 percent respectively to projected revenue.

Mabogunje commended policies and strategies targeted at improving non-oil revenue in the budget, including the 2020 Finance Act, but noted that some of the assumptions guiding the budget were unrealistic.

READ ALSO: Nigerians to see poverty, inflation, debt worsened in 2021— LCCI

“There are assumptions of GDP growth rate of 3 percent; inflation rate of 11.95 percent; 379/$ naira foreign exchange(FX)  benchmark; 40 dollars per barrel oil price target and oil production of 1.86 million barrel/day.

“While we consider the oil price and production assumption as realistic, assumptions on inflation, growth, and FX rate do not appear to reflect the current realities,” she cautioned.






     

     

    She further said that the federal government’s target to source 70 percent of projected revenue from the non-oil sector through taxation was rather ambitious, given that corporate entities were still faced with lingering effects of covid-19 disruptions.

    “This goal cannot be accomplished without a supportive macroeconomic and policy environment that encourages the ease of doing business,” Mabogunje stated.

    “An enabling environment that supports business growth and expansion provides the impetus to improve revenue mobilisation in the non-oil sector. The creation of an enabling business environment must be at the forefront of government’s revenue mobilisation strategies in year 2021,” she advised.

    She recommended that budget monitoring mechanism be strengthened by constituting a private-public stakeholders’ committee to oversee the implementation process.

     

     

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