Revenue Challenges May Elongate Economic Recession- Deloitte

Nigeria’s economic recession may linger over revenue shortfalls, a signal that the country needs to braze up for a tough year, London based leading accounting firm Deloitte, has said.

The firm’s West African Tax Leader, Yomi Olugbenro, disclosed this on Thursday during a monitored programme on the 2021 economic outlook for Nigeria on TVC News.

The statement comes amid Nigeria’s revenue woes, including N5trn deficit from a N13.5trn budget approved for 2021.

Olugbenro said, “The Covid-19 pandemic is still here with us and there are fears around a second wave of it and you look at the headwind that Nigeria has got from a fiscal spending and budgetary perspective and the tough task in raising revenue to be able to do that, we will know that it is a year that we really need to braze up for some challenging time.”

The country hopes to cover its budget shortfall through borrowings from both the domestic market and from international lenders.

Owing to the fall in oil prices which was triggered by the pandemic, the country targets about N7.8trn revenue for this year.

The expert said in the recent past,the country has never met its revenue projection.

According to Olugbenro, the revenue result, if achieved, may not cover the country’s recurrent and the debt service obligations.

He said, “There isn’t any guarantee based on our trajectory that even the N7.8trn revenue that we plan to make will be achieved 100 per cent.

“Every optimism that everyone has expressed around the country getting out of recession maybe towards the third or fourth quarter of the year, each of those plans is put around the possibility that the government will be able to marshal the revenue. But I have my doubt if we judge by our trajectory.”

Olugbenro noted that the Ministry of Finance and other government revenue agencies have a tough job to mobilise the needed revenue to finance the budget.