Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, yesterday lamented the 65 per cent decline in Federal Government’s revenue inflow in the first half of the year , warning the trend was likely to continue into the third quarter.
Speaking during a capacity building workshop for Special Advisers and Technical Assistants of Ministers of Federal Government in Abuja, the Minister said that the full implementation of the lock-down and social distancing measures led to a near complete shut-down of economic activities, lay-offs across most sectors; including loss of income, and a drop in average household purchasing power.
“All of this took place against the backdrop of the most recent National Bureau of Statistics five-year household survey on poverty in Nigeria, which has found that the annual household income is less than N137,000 (equivalent to approx. N11,000 per month) for more than 40 per cent of Nigerian households. What began as a health crisis has quickly snowballed into a global economic crisis, and the effects have been swift and far-reaching, and Nigeria has not been insulated from this,” she said.
Prior to the COVID 19 pandemic, she noted that the implementation of the Economic Recovery Growth Plan (ERGP), saw that the government had a very prudent resource management and fiscal policy implementation.
The effort, according to her, led to 11 consecutive quarters of GDP growth, with GDP growth from 1.91 per cent in 2018 to 2.27 per cent in 2019.
“Furthermore, we had passed the 2020 Budget in record time, ushering in a necessary return to the January – December budgeting cycle. To support government’s focus on diversifying away from oil revenues, and enhancing domestic resource mobilisation, Mr. President also approved, and we passed into law the 2020 Finance Act.
“These are some of the constraints that define our post-COVID 19 reality and have in turn informed our fiscal strategy and health response.
In her remarks, Ambassador of the Federal Republic of Germany to the Federal Republic of Nigeria, Mrs Birgitt Ory said that the bane of African countries is lack of good governance.
She explained that good governance is made up of institutions, diversity and ownership.
“Institutions should be effective, reliable and transparency. This is important for accountability but also for economic development.
Meanwhile, Nigeria’s three tiers of government and other agencies shared a total of N651.184 billion as June federation account revenue. The figure is N103 million higher than N547.309 billion shared in May when the COVID-19 pandemic took a higher toll on government’s finances.
Details of the June revenue sharing programme was contained in a communiqué released yesterday by the Federation Account Allocation Committee (FAAC) after its monthly meeting for July held through virtual conferencing and chaired by the Accountant-General of the Federation, Ahmed Idris.
The gross statutory revenue available in June was N524.526 billion; the gross revenue from the Value Added Tax (VAT) was N128.826 billion and the revenue from the Exchange Gain was N42.832 billion. This brought the total revenue for the month to N696.184 billion.
From this total, N45 billion was transfered to the excess crude revenue account and the balance of N651.184 billion was shared to the three tiers of government and relevant agencies.
With this injection, the balance in the Excess Crude Account (ECA) as at July 16, 2020 was $72.407 million.