
News
Nigeria facing existential threat, World Bank warns
In light of Nigeria’s dwindling revenue, the continued payment of trillions of naira on fuel subsidy by the government and the attendant economic challenges, the World Bank on Wednesday raised the alarm that the country might be facing an existential threat.
The international financial institution warned that if the country failed to optimise its tax system and focus on other areas to boost its revenue, the already low revenue would continue to drop. It noted that despite the rise in the price of oil in the international market, Nigeria had not reaped the benefits because of the huge amount spent on fuel subsidy.
The Senior Public Sector Specialist, Domestic Resource Mobilisation, at the World Bank, Mr Rajul Awasthi, said these at a virtual pre-summit, with the theme ‘Critical Tax Reforms for Shared Prosperity’, organised by the Nigerian Economic Summit Group on Wednesday. He insisted Nigeria would have to eliminate the subsidy regime eventually.
After the Federal Government earmarked about N4tn for subsidy payment in 2022, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, said recently that government might spend a whopping N6.72tn as fuel subsidy in 2023 or pay N3.36tn up to mid-2023 if the subsidy regime would was to end in May 2023.
Also, the minister had consistently said the nation was battling with revenue problems, which had compelled the government to keep borrowing. The debt stock had risen to N41.6tn in the first quarter of 2022 with projections that it could peak at N45tn by the end of the year. Nigeria is rated the fifth on the list of the World Bank’s debtors, with $11.7bn debt stock as of June 30, 2021.

The International Monetary Fund had in March projected that Nigeria might spend 93 per cent of its revenue on debt servicing in 2022, but the minister disclosed a few weeks ago that about 119 per cent of the country’s revenue was spent on debt servicing. This implied that government had to borrow to meet its debt financing obligations, a development many economists had described as disturbing and unsustainable.
The virtual event, anchored by the PwC’s Fiscal Policy Partner and Thematic Lead, NESG Fiscal Policy and Planning Thematic Group, Mr Taiwo Oyedele, was attended by several stakeholders, including the representative of the Manufacturers Association of Nigeria and the Executive Secretary of the Joint Tax Board, Mrs Nana-Aisha Obomeghie.
Meanwhile, in a slide he shared during his presentation, which showed Nigeria’s Development Update, Awasthi explained that between 2015 and 2019, Nigeria’s non-oil revenues were among the lowest in the world and as a result the second lowest in spending, and that oil revenues were also falling even when oil prices were higher.
He stated, “Nigeria has the largest economy in Africa and the largest country in Africa by population, so it is critical to Africa’s progress. There is no doubt about that. But the government of Nigeria, from the public finance perspective, is really facing an existential threat. Let’s not downplay the situation. That is the actual reality.
Nigeria’s revenue
“Nigeria is 115th out of 115 countries in terms of the average revenue to Gross Domestic Product ratio. Despite the oil prices rising the way they have been, net oil and gas revenues have been coming down because of the tremendous impact of the subsidy.
“So, what is going to happen in 2022? The federation’s revenues are going to be significantly lower. They are already very low, and Nigeria is already the lowest in the world out of 115 large countries and this year, it’s really going to be lower than what it was in 2020 because of the debilitating impact of fuel subsidy.”
On the perennial low revenue from tax in Nigeria, a former Finance Minister and Ahmed’s predecessor, Mrs Kemi Adeosun, had in 2017 revealed that only 214 persons in Nigeria paid N20m and above as tax and that most active taxpayers in the country were people whose PAYE were deducted from source. She had also decried the low tax to GDP ratio at about six per cent, which she described as the lowest in the world and far below the 18 per cent average on the continent.
Speaking on how to get out of the woods, Awasthi stated that in the non-oil sector, Value Added Tax compliance gaps were immense and they needed to be breached as well as rationalise tax expenditures.
Citing the tax expenditure statement of the Budget Office in 2020, he said, “The VAT gap in 2019 was over N3.1tn whereas the collection was N1.2tn. Of that gap, about two-thirds, which is about N2tn, came from compliance gaps. That’s a serious issue that needs to be addressed. It’s because of this that we have a low tax base and a lot of people feel they are being overtaxed.”
He also stressed the need for technology deployment in tax administration and data sharing between the Federal Inland Revenue Service and the states’ Internal revenue services to boost the revenue from personal income tax. He also called for an increase in the tax levied on certain goods, like wine, cigarettes and beer.
He added, “Property taxes at the state and local government levels are also critical. Nigeria has a tremendous potential, with about 50 million households, taxable properties and there are many rich people who need to be paying property taxes. There is a tremendous opportunity there.
“Also, I think there is a huge opportunity to raise excise on goods like beer, wine, spirit and cigarettes. There is a very tiny tax that has been introduced on them and this could be higher. These are the kinds of things that across the world there is a consensus that these rates should be higher because they are supposed to attack and address negative externalities of these products.
“There is also a need to reform the fuel subsidy regime, moving towards its full elimination at least by 2024. Nigeria needs to roll back the PMC subsidies and adopt the free market price. This is critical for this country. There is also the need to improve revenue from cross-border transactions and other international tax measures.”
While calling for increased enlightenment of the taxpayers, which he said the World Bank was collaborating with the World Bank to achieve, he noted that tax laws needed to be modernised and strengthened for a better outcome.
He added, “Going forward, the approach to revenue mobilisation has to be more strategic. We need to be more strategic and it’s not just about taxing more, Nigeria needs to tax better. We need to review the collection system and not just about what to collect and from who. There have been discussions about how the tax system has to be progressive and efficient in terms of compliance and making sure we are targeting the right tax bases.”
In his submission, the Director-General of MAN, Mr Segun Ajayi-Kadiri, represented by the Director of Mr Oluwasegun Osidipe, said there was no doubt that the country needed money but that the government must exercise caution in introducing more taxes.
He tasked the government to expand the tax base, ensure the inclusion of more people in the informal sector and make the tax system progressive such that the rich would pay more than the poor.
MAN advises
He said, “MAN’s expectation is that, though we need more revenue, the tax system should be structured to take more resources from the rich than the poor. Also, more taxes should be targeted at ostentatious goods and luxury goods. Those who earn more income one way or the other should pay more.
“There is a need for us as a nation to sit at a table and agree that we need to develop a comprehensive and integrated framework that would facilitate the intentional movement of operators in the informal sector to the formal sector and that would make us bring in more revenue for the government through tax.
“Whether we like it or not, huge sums of money in transactions are taking place in the informal sector, and we need to integrate them into the tax system rather than overburden the already compliant companies. If you look at the gamut of taxes levied on companies, they are huge. There are over 12 and additional ones are still coming. There is a need for that framework.
“We need to widen the tax net rather than increasing the burden on existing taxpayers. We need to promote harmonisation of taxes and there is a need for more consultation among stakeholders. Nigeria is at a crossroads but all hands must be on deck, especially looking at Nigeria’s low tax to GDP ratio.”
Other participants at the event also demanded an improved tax system that would ensure that those outside the tax net were integrated into the net to avoid excessive burden on those in the net.
Commenting on the World Bank’s warning, an economist, Bismark Riwane, in an interview with The PUNCH, advised that the only way out of the economic crisis was to make people prosperous so that they will pay more taxes for the economy to grow.
“The Federal Government has come out clearly with the Gross Domestic Profit ratio. One is the number of taxes two is the effectiveness of the taxes. So the question is, are we collecting the taxes that are due, two are we collecting it efficiently and three, what are we using the tax revenues for? So there are questions there but to answer your question I do not agree with the World Bank that the best thing to do now is to start increasing taxes all over the places. The emphasis to me is to achieve growth, when there is growth companies will be doing well and people income increase and therefore the taxes people will pay become more.”
Also speaking, an Associate Professor at Pan-Atlantic University, Dr Olalekan Aworinde, said, “What the World Bank is proposing is what we call property right that has to do probably, it could be in terms of estate or building apartments that are owned by the rich. Well, there’s nothing wrong in that but my fear is that it could be a double taxation because if this is implemented at all, you know our local government always collect tenement rate and I know that also in Lagos State they are effective in terms of this collection.” (PUNCH)
News
Sokoto residents stage protest over kidnappings, attacks
Aggrieved people of Tambuwal Local Government Area of Sokoto State took to the streets on Friday in protest against incessant attacks, kidnappings and the worsening security situation threatening lives, livelihoods and economic activities in the area.
The protest, which reportedly drew residents from parts of the local government, was said to have been triggered by growing fears over repeated attacks and abductions allegedly carried out by armed criminals operating around vulnerable communities.
The protesters expressed deep concern over what they described as the persistent insecurity confronting the area, calling on the Federal and Sokoto State governments to take urgent and decisive measures to protect residents from further attacks.
They lamented that the continued incidents had created an atmosphere of fear, particularly among farmers, traders and rural dwellers whose livelihoods depend largely on unrestricted access to farms, markets and other economic activities.
The demonstrators reportedly demanded the deployment of more security personnel and operational assets to vulnerable communities, insisting that security agencies must intensify patrols, surveillance and intelligence-led operations to prevent further attacks.

They also appealed for stronger collaboration among the military, police and other security agencies to track down criminal elements responsible for the attacks and restore confidence among residents.
The protesters said the situation had assumed a disturbing dimension capable of undermining agricultural production and forcing residents to abandon their communities and farmlands for safer locations.
Responding to concerns over the development, the Sokoto State Police Command confirmed that it was aware of the situation and assured residents that security operatives were “on top of the situation.”
The Command’s Public Relations Officer, Deputy Superintendent of Police (DSP) Ahmad Rufai, who confirmed the development, said the police were monitoring the situation and taking necessary measures to maintain security and protect lives and property in the affected area.
The assurance came amid heightened anxiety among residents, many of whom are demanding not only immediate security intervention but also sustained operations capable of preventing further attacks and kidnappings.
The latest protest has further highlighted the mounting security challenges confronting parts of the North-West, where banditry and kidnapping have continued to threaten rural communities, disrupt agriculture and inflict severe social and economic hardship on vulnerable populations.
Residents are therefore urging the authorities to translate assurances into visible and sustained security operations, arguing that the ultimate measure of success would be the restoration of peace and the ability of citizens to live, farm and conduct their legitimate businesses without fear.
As tension persists, stakeholders are calling for strengthened intelligence gathering, community engagement and coordinated security operations to ensure that Tambuwal and neighbouring communities do not become increasingly vulnerable to criminal elements. (Vanguard)
News
Xenophobic Attacks: Nigeria’s Parliament suspends visits to South Africa, boycotts legislative events
Nigeria’s National Assembly has suspended all official visits to South Africa and ordered a boycott of legislative activities hosted or organised by the country until further notice, over renewed reports of xenophobic attacks against Nigerians and other African nationals.
The decision was contained in a statement signed by the Clerk to the National Assembly, Kamoru Ogunlana, Esq., on behalf of the leadership of the Senate and House of Representatives.
The National Assembly leadership said it was deeply concerned by the continued violence, intimidation, destruction of property and other forms of hostility directed at Nigerians and other African nationals living in South Africa.
It said the decision was taken in response to the failure of repeated appeals by the Nigerian government and other stakeholders for South African authorities to take decisive action to protect Nigerians and other foreign nationals and bring perpetrators of xenophobic attacks to justice.
Under the resolution, all official visits to South Africa by lawmakers, National Assembly committees, officials and staff have been suspended.

The boycott also covers conferences, seminars, workshops, parliamentary meetings, legislative exchanges and other activities organised or hosted by South African legislative authorities.
The National Assembly further directed that its officials and lawmakers should not participate in South African-hosted legislative programmes either physically or through virtual or online platforms.
The Clerk to the National Assembly, Kamoru Ogunlana, has consequently been directed to communicate the decision to senators, members of the House of Representatives, committees, departments, directorates, officials and staff for strict compliance.
However, the National Assembly stressed that the decision was not intended to undermine the longstanding diplomatic, historical and people-to-people relations between Nigeria and South Africa.
Rather, it described the move as a strong expression of concern over the safety, dignity and welfare of Nigerians living and conducting legitimate businesses in South Africa.
The lawmakers called on the South African government to urgently protect Nigerians and other African nationals, prevent further xenophobic attacks, thoroughly investigate reported incidents, arrest suspected perpetrators and prosecute those found culpable.
The National Assembly also urged State Houses of Assembly to take note of the decision and consider adopting similar measures.
It said the suspension and boycott would remain in force until further notice and would be subject to review as circumstances warrant.
News
Nigerian Association condemns Brutal Murder of Bishop Fakunle in South Africa
… demands justice
The Nigerian Citizens Association South Africa (NICASA) has condemned the killing of Bishop Taiwo Michael Fakunle, a 58-year-old Nigerian citizen, in Johannesburg, South Africa.
Fakunle was reportedly killed on Friday at his residence in Kensington, Johannesburg.
In a statement, NICASA President, Rev. Frank Onyekwelu, said the Nigerian community was shocked, outraged and deeply saddened by the bishop’s death.
Onyekwelu said preliminary information indicated that two suspects gained access to Fakunle’s residence and opened fire on him, reportedly shooting him more than seven times.
He said the killing of Fakunle, who hailed from Iye, Ilejemeje Local Government Area of Ekiti State, was more than an ordinary loss of life, describing it as a tragedy that had deeply affected the Nigerian community in South Africa.

Onyekwelu vowed that NICASA would pursue justice through every legitimate and lawful channel available.
The association called on the South African Police Service (SAPS) to conduct a thorough investigation into the killing and ensure that those responsible were brought to justice.
“We therefore make a strong and unequivocal call on the South African Police Service and every relevant government authority to pursue this matter with the highest level of urgency, professionalism and transparency.
“We demand a thorough and credible investigation that will establish exactly what happened, identify all those responsible, apprehend the perpetrators and ensure that they are brought before the courts to face the full might of the law.”
He stressed, “This was not merely an ordinary loss of life; it was a horrific and senseless act of violence that has robbed a family of a loved one and the Nigerian community of another precious life.
“NICASA condemns this barbaric killing in the strongest possible terms. Enough is enough.
“The continued loss of Nigerian lives through violent crime is deeply disturbing and cannot be allowed to become normal or treated as just another statistic. Every Nigerian life is valuable, and every murder deserves justice.”
Onyekwelu said the Consulate General of Nigeria in Johannesburg has been informed of the tragic incident.
We also note that a murder case has been opened at Jeppe Police Station, and investigations are currently ongoing.
We therefore make a strong and unequivocal call on the South African Police Service and every relevant government authority to pursue this matter with the highest level of urgency, professionalism and transparency.
We demand a thorough and credible investigation that will establish exactly what happened, identify all those responsible, apprehend the perpetrators and ensure that they are brought before the courts to face the full might of the law.”
He added, “The family deserves answers. The Nigerian community deserves justice. Bishop Taiwo deserves justice.
“NICASA further called on the Nigerian diplomatic authorities in South Africa to continue engaging the relevant South African authorities and to closely monitor the progress of the investigation until justice is served.
“We appeal to the South African authorities: Please do not allow this case to go cold. Do not allow another Nigerian life lost to violence to become another forgotten file. We expect accountability and justice.
“At this extremely painful moment, NICASA extends its deepest and heartfelt condolences to the immediate family of the late Bishop Taiwo Michael Fakunle, his relatives, friends, church community, fellow Ekiti indigenes and the entire Nigerian community.
“We pray that Almighty God will grant the family strength, comfort and the fortitude to bear this devastating loss. May the soul of Bishop Taiwo Michael Fakunle rest in perfect peace.
“NICASA equally calls on all Nigerians and Nigerian community leaders across South Africa to remain calm, peaceful and strictly law-abiding. We must not take the law into our own hands or allow our grief and anger to lead to further violence.
“We will pursue justice through every legitimate and lawful channel available to us.
“NICASA will continue to engage the relevant authorities and will follow the investigation closely, because the pursuit of justice for Bishop Taiwo is a responsibility we must not abandon.”
He added, “Enough of the killings. Nigerian lives matter. Justice for Bishop Taiwo Michael Fakunle.”
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