Oil revenue shortfalls and petrol subsidy deductions, according to Zainab Ahmed, minister of finance, budget, and national planning, are posing challenges to the full implementation of the 2022 budget.
Ahmed stated this on Wednesday, when she appeared before the House Committee on Finance to present the performance of the fiscal year 2022 budget.
She stated that the decline in the oil revenue target has hampered the achievement of the nation’s revenue target.
While presenting the 2022 budget performance, Ahmed stated that the federal government is taking steps to increase the country’s revenue.
“The full implementation of the 2022 budget is challenged particularly by oil revenues that are falling target at 27.1 percent as of August.
“Crude oil production challenges and PMS subsidy deductions by the NNPC constitute a significant threat to the achievement of our revenue growth target as seen in the oil and gas performance 2022 as of August,” the finance minister said.
“Revenue generation remains the major fiscal constraint of the federation. The systemic resource mobilisation problem has been compounded by recent economic recessions we have witnessed, one during the first term of this administration in 2016, and the most recent one in 2020. But effort has mainly focused on improving tax administration and collection.
“The finance act 2020 that pegs the revenue to expenditure ratio of the government own enterprises at 50:50 has helped us greatly in ramping up revenues from the government-owned enterprises and the fact can be seen in the performance of the GOEs revenue of 1.3 trillion as of 2021.
“We are also putting effort into improving non-oil taxes and this is showing in the result of the performance of the non-oil target showing clearly that the non-oil revenues are performing below target and in fact, the non-oil revenues are now over 70 percent of the revenue performance of the federal government budget.”
Inflation
Responding to lawmakers’ questions about what the federal government is doing to combat inflation in the country, Ahmed stated that President Muhammadu Buhari has authorized the national food security council to meet and generate solutions to the country’s high food prices.
She explained that the high cost of diesel was contributing to rising food prices.
“In Nigeria, we also have inflation and one of the buckets of inflation is food inflation. This can be seen in the high cost of energy and diesel,” Ahmed said.
“We find this showing up in food prices. Prices are going up because diesel prices are high. So when farmers produce their goods and they have to transport the goods to the market. The NBS data shows that food prices have actually declined but the cost of production is continuously increasing and impacting the cost of goods and unfortunately affecting our people.
“From the monetary side, what the CBN is doing is continuing to manage inflation by monetary tightening and by mopping up liquidity.
“On the side of the government, the president has authorised the national food security council and we have held meetings — even yesterday — on how some support will be provided.
“One of the means will be releasing stocks from the strategic reserves but also looking at how to provide some support in form of input in fertilizer production as well as input.”
The minister went on to say that the food security council will make recommendations to the president “in the next couple of days,” which will then be announced for implementation.
