By Ayomide Joseph
Anticipation is mounting as Nigeria sets an ambitious target of a 77% increase in internally generated revenue (IGR) amid prevailing economic challenges. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, shared this objective during the commencement of the 2024 Strategic Management Retreat of the Federal Inland Revenue Service (FIRS) in Abuja.
Edun underscored the pivotal role of taxes in fortifying government revenue, commending FIRS management for its unwavering commitment to meeting revenue targets. He articulated the government’s intent to utilize augmented revenue for infrastructure development and social safety nets, emphasizing the potential positive impact on citizens.
Highlighting the current low percentage of revenue relative to Gross Domestic Product (GDP), Edun emphasized the imperative to transition from reliance on costly debts to domestic revenue mobilization. The bold 77% IGR growth projection aligns with the government’s broader strategy to bolster financial sustainability.
It is commendable that the FIRS is holding this retreat at the beginning of the year to rub minds on how to increase government revenue. We are projecting a 77 per cent increase in IGR. Our revenue as a percentage of Gross Domestic Product is low, below 10 per cent. It should be much higher.
“The government needs so much to spend on infrastructure and social services. The idea is to shift from expensive debts to domestic revenue mobilisation”, he said
This development coincides with the resumption of operations at the Port Harcourt and just as Dangote refineries commences operations, signifying Nigeria’s renewed effort to reduce dependence on imported fuel. Despite past rehabilitation initiatives, Africa’s largest oil exporter has consistently relied on imported refined petroleum products.
Last year, Nigeria incurred a significant expenditure of $23.3 billion on petroleum product imports, with a daily consumption of around 33 million liters (8.7 million gallons) of petrol. The imminent operation of the Dangote refinery, boasting a substantial capacity of 650,000 barrels per day (bpd), and progress in the Port Harcourt refinery (60,000 bpd), Edo Refinery and Petrochemical Company (ERPC – 6,000 bpd), and Duport Midstream Company Limited facility (DMCL – 10,000 bpd) are anticipated to make substantial contributions to the country’s IGR.
However, stakeholders caution that the commencement of refinery operations may not necessarily lead to a significant impact on the retail price of fuel, an issue highlighted on multiple occasions. The unfolding developments at these refineries hold promise for Nigeria’s economic recovery and the diversification of revenue sources.
