Nigeria’s minister of finance and coordinating minister for the economy, Dr Ngozi Okonjo-Iweala, has offered the president-elect, Muhammadu Buhari, a word of advice concerning the diversification of the country’s revenue sources.
Okonjo-Iweala, who spoke yesterday in Washington DC on the theme: “Beyond the oil” at a forum tagged: “A conversation with Ngozi Okonjo-Iweala”, said the incoming government should tinker with the option of raising the Value Added Tax (VAT), which at its present five per cent level, she pointed out, is the lowest in the world.
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Raising the margin by another five per cent, Okonjo-Iweala argued, would make a difference in increasing revenue. She revealed that the proposal is already included in the 2015 budget before the National Assembly.
“We can look at other taxes, like the VAT, which is in the budget for 2015. We have the lowest VAT in the world, which can be doubled. This can bring another $3billion into the revenue profile,” Mrs. Okonjo-Iweala said, adding that these steps are needed to drive the economy beyond oil.
She said President Goodluck Jonathan’s position, which she is recommending to the incoming government, is to reverse the ratio of crude oil-Non oil contribution to revenue from 70%-30% in favour of oil, to Non oil- crude oil contribution of 70%-30% in favour of Non-oil over the next 10 years.
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The minister, who spoke on a wide range of issues, impressed on the need for the incoming Gen Muhammadu Buhari administration to build institutions designed to fight corruption.
She called for reforms in the oil sector. The Nigerian National Petroleum Corporation (NNPC), she said, should be restructutred and the Petroleum Industry Bill should be passed.
The Nation reports that Okonjo-Iweala spared no kind word for politicians bent on spending almost everything that comes into the government’s coffers. She stressed the need for the government to rebuild its buffers.
The minister’s presentation was witnessed by a one time Lagos State commissioner for finance Wale Edun, Nigeria’s ambassador to the US, Professor Ade Adefuye, the director of the budget, Dr. Bright Okogu, and the former executive chairman of the Federal Inland Revenue Service, Imoigui Ifueko-Okauru, among other guests. The programme was moderated by Ambassador Princeton N. Lyman, a former US special envoy for Sudan and South Sudan.
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Two weeks ago, Okonjo-Iweala revealed that the federal government will be taking a loan of $2 billion from the World Bank and the African Development Bank (AfDB) to assist in the implementation of its policies and programmes for the year.