Worried by the country’s current low revenue generation, the World Bank has started working with the Federal Government to raise the capacity of the nation to generate more income from internal sources.
This was made known by World Bank Nigeria Director, Mr. Rachid Benmessaoud, who spoke on Tuesday at the First Ever Event of Ideas for Action Africa at the African University of Science and Technology in Abuja.
Benmessaoud said it was the responsibility of each country to mobilise domestic revenues in order to make development sustainable.
The World Bank boss added that development had to be led by each country with a focus on protecting its most vulnerable and benefitting its poor.
He said, “The success of society is linked to the well-being of each and every citizen. Reducing the number of out of school children, ensuring quality and affordable healthcare for all, ensuring that every voice is heard regardless of gender, providing employment and growth opportunities for the youth, tackling malnutrition in children and ensuring adequate social protection measures which meaningfully protect the poor and vulnerable are in place.
“We are living in a time of multiple overlapping challenges: epidemics, climate change, human displacement resulting from fragile, violence and conflict situations, threats of famine and increased vulnerability to natural disasters. It is essential to help countries prepare for these crises through capacity development to ensure there are early warning systems and rapid response systems in place.”
Benmessaoud said against this backdrop, allocation for fragile states under the International Development Association (IDA) had doubled to more than $14bn. With this, he said, the World Bank would continue to find new and innovative ways to reach the poor and boost shared prosperity.
The Federal Government may have sought the assistance of the World Bank to help it shore up its dwindling revenues as different government officials had lamented that the government revenues were dwindling in the midst of mounting infrastructure deficit.
The Minister of Finance, Mrs. Kemi Adeosun, had in May 2017, for instance, lamented that the nation’s tax revenue was one of the worst in the world. She said that the country’s tax to Gross Domestic Product ratio put at six per cent was one of the lowest in the world.
Adeosun had said, “While oil proceeds have represented between 50 per cent and 70 per cent of the Federal Government revenue over the past three years, it has contributed 10 per cent or less to the Gross Domestic Product in the same period.
“We must change our growth model to deliver inclusive and sustainable growth by broadening the range of our economic activities in the production and distribution of goods and services.
“We have an unacceptably low level of non-oil revenue and much of that is driven by a failure to collect tax revenues. With a tax to GDP ratio of only six per cent, one of the lowest levels in the world, we have a lot of work to do if we are going to build a sustainable revenue base that will deliver inclusive growth.”
The country’s low revenue generation, according to some experts, has rendered the country’s debt unsustainable because of lack of funds to pay debt service charges.