Connect with us

News

Nigeria facing existential threat, World Bank warns

Published

on

Spread the love

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.

Maduka College Advert

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

Hardship: Give account of subsidy removal proceeds – APM tells APC govt

Published

on

APC sweeps Imo LG election
Spread the love

The Allied People’s Movement (APM) has asked the Bola Tinubu-led All Progressives Congress (APC) administration to end its rhetoric and immediately provide Nigerians with a comprehensive account of the trillions of naira realized from the removal of fuel subsidy since May 2023.

APM’s demand is predicated on the worsening economic hardship and poverty rate, high cost of living, collapsed public facilities and yawning infrastructure deficit across the country since the emergence of the Tinubu administration despite huge national inflow including the over N20 trillion proceed from the removal of fuel subsidy, which the administration promised would be channeled towards improving the welfare of Nigerians.

This is contained in a press release issued by the National Publicity Secretary, Abubakar Yusuf.

He said: “For over three years, Nigerians have endured unprecedented hardship following President Tinubu’s May 29, 2023 declaration that ‘subsidy is gone’. This came with an instant surge in fuel price from below ₦200 per litre to now over N1,500 per liter setting off a chain reaction that pushed transport fares, food prices, school fees, medical bills, house rents, electricity costs and the prices of everyday goods and services far beyond the reach of ordinary citizens.

“More distressing is reports of massive corruption, diversion and frittering of bulk of the funds accruable to the Federal Government while officials continue to bandy figures and fictitious achievements

Maduka College Advert

“Under the APC administration hunger has become a national emergency. Millions of families are going without daily meals. Small businesses are collapsing under rising operating costs. The purchasing power of workers has been abysmally degraded, while poverty and unemployment continue to rise at alarming rates. Across the country, frustration is growing as more citizens struggle to survive.

“Today under the APC, Nigeria’s infrastructure deficit has hit an estimated $2.3 trillion, with experts stating that the gap would require approximately $100 billion annually over the next 30 years.”

Continuing, the APM spokesman said “despite the heavy premiums citizens pay daily, the APC administration is not forthcoming with a transparent account of the trillions accrued to it from the removal of subsidy. No comprehensive public record has been presented to demonstrate how much has been realized, how much has been spent, and whether those expenditures have translated into measurable improvements in the lives of citizens.

“The vague claims by the APC government that the proceed is being invested in critical sectors without real figures and specific project or programme is completely unacceptable and cannot substitute for transparency and accountability.”

The APM therefore demanded that the Federal Government should immediately publish a detailed and independently verifiable impact assessment of the subsidy removal policy.

“Nigerians deserve to know the exact amount saved since May 2023, the projects funded and their locations.

“The APM is not opposed to reforms that genuinely advance national development. However, the APC government cannot continue to celebrate figures on paper while millions of citizens can no longer afford decent meals, healthcare, transportation, or quality education. The true measure of any economic reform is not the volume of official pronouncements but its tangible impact on the lives of the people,” it further stated.

The APM therefore called on the Tinubu administration to rise above political rhetoric and immediately release a comprehensive public report detailing the total subsidy savings since May 2023, all expenditures made from the fund, the beneficiaries of every intervention, and the measurable outcomes achieved.

“The APM, the voice of Nigerians today, is not asking the Tinubu-led APC Federal Government to do anything extraordinary. We are simply demanding the transparency and accountability that an APM administration would have seamlessly demonstrated by publicly disclosing and accounting for every kobo that belongs to Nigerians,” Yusuf concluded.

Continue Reading

News

27 killed as armed men launch fresh attacks on Benue, Plateau communities

Published

on

Youths protest killings
Spread the love

…Youths protest at Och’Idoma’s palace, block roads with corpses, demand action

No fewer than 27 persons have been killed in separate attacks on communities in Benue and Plateau states, following fresh assaults by suspected armed groups that have left residents mourning and demanding urgent government intervention.

In Benue State, at least 18 persons were killed in separate attacks on communities in Otukpo Local Government Area, while nine members of the same family, including a two-month-old baby, were killed in an attack on Kum and Wereng-Camp communities in Riyom Local Government Area of Plateau State.

In Benue South, suspected armed herdsmen reportedly launched attacks on Akpachi village in Ugboju community and Otukpo-Nobi community over the weekend.

The first attack occurred on Friday when the assailants invaded Akpachi village, killing two farmers on their farmland. Their bodies were recovered on Saturday and buried.

Maduka College Advert

Barely 24 hours later, at about 4am on Sunday, the attackers struck Otukpo-Nobi community, killing at least 16 persons and injuring several others.

The renewed violence came about two weeks after the killing of the Benue State Chairman of the Miyetti Allah Cattle Breeders Association of Nigeria (MACBAN), Alhaji Ardo Risku Mohammed, and his companion, Yakubu Isah, who were ambushed and killed at Okutu community in Otukpo while returning from a peace meeting in Idekpa, Ohimini Local Government Area.

The latest killings triggered outrage in Otukpo as angry youths stormed the palace of the Och’Idoma with the bodies of victims, disrupting an ongoing church service and demanding decisive action from the authorities.

The protesters, chanting war songs, accused government and security agencies of failing to protect their communities, insisting that the recurring attacks must stop.

The protest caused tension in the town as youths blocked major roads, leaving commuters stranded for hours.

A resident, Ebi Adoyi, who joined the protest, said the attacks had thrown affected communities into mourning, adding that more casualties could be recorded as searches for missing persons continue.

“After killing two people in Akpachi on Friday, they attacked Otukpo-Nobi, killing 16 persons, including women and children. My neighbour lost her elder sister and her children in that attack,” he said.

Chairman of Otukpo Local Government Area, Maxwell Ogiri, confirmed the attacks, linking them to possible reprisals following the killing of the MACBAN chairman.

He said the first attack occurred when three villagers went to their farms in Akpachi.

“The attackers came and killed two of them. One escaped and alerted the community. We recovered the corpses on Saturday and buried them. We had combed the bushes believing the attackers had fled, but early Sunday morning, around 4am, we received reports that they had besieged Otukpo-Nobi, killing several people and injuring many others,” Ogiri said.

He added that efforts were ongoing to relocate survivors to safer locations, provide medical assistance and strengthen security in the affected areas.

Meanwhile, Governor Hyacinth Alia condemned the Benue attacks, describing them as barbaric and an assault on the lives and peace of the people.

In a statement by his Chief Press Secretary, Tersoo Kula, the governor directed security agencies to intensify surveillance, collaborate with neighbouring states, track down the attackers and ensure they are prosecuted.

In Plateau State, the attack on Kum and Wereng-Camp communities in Riyom Local Government Area occurred late Saturday night.

Residents said the gunmen stormed the communities at about 11:30pm and operated for over an hour, shooting indiscriminately and forcing residents to flee into nearby bushes.

A resident, Precious Tok, said the attackers invaded a home and killed nine members of the same family, including a two-month-old baby.

The village head was also reportedly attacked and sustained critical injuries.

National Publicity Secretary of the Berom Youth Moulders Association, Rwang Tengwong, confirmed the incident, saying the attackers struck under the cover of darkness and unleashed violence on helpless residents.

He said security agencies had been alerted and expressed hope that those responsible would be arrested and brought to justice.

The latest attack has heightened fears among residents, who called on the Federal and Plateau State Governments to strengthen security measures in Riyom and other vulnerable communities.

Security personnel have reportedly been deployed to the affected areas, while many residents remain displaced and apprehensive over possible further attacks.

Efforts to obtain official confirmation from the Plateau State Police Command were unsuccessful as of the time of filing this report. (Vanguard)

Continue Reading

News

Notorious bandit kingpin Kachalla Yellow shot dead by Hybrid forces

Published

on

Killed notorious bandit kingpin Kachalla Sani Yellow
Spread the love

…His body dragged through roadway in victory parade

Hybrid security forces supporting counter-insurgency and anti-banditry operations in Nigeria’s North-West have reportedly killed Kachalla Sani Yellow, a notorious bandit commander accused of masterminding deadly attacks, kidnappings, cattle rustling and widespread sexual violence across Zamfara State, before dragging his body through a roadway in a victory procession.

PRNigeria obtained a video purportedly showing members of the hybrid force tying Sani Yellow’s lifeless body to a motorcycle and dragging it along a road as a convoy of armed volunteers celebrated what they described as the elimination of one of the region’s most feared criminal leaders.

The operation followed a carefully coordinated intelligence-led ambush, resulting in the death of the feared gang leader.

Highly placed security and community sources told PRNigeria that the hybrid forces—comprising local volunteers and reformed former insurgents from the North-East (Repented Boko Haram), working alongside security agencies in some operational areas—have become increasingly effective at tracking criminal movements through intelligence provided by local communities.

Their operations have focused on ambushing armed bandit convoys, disrupting logistics networks and targeting high-value commanders responsible for attacks on vulnerable communities.

Maduka College Advert

According to the sources, Sani Yellow was intercepted while visiting a local market, where he had allegedly gone to collect proceeds from rustled livestock and negotiate ransom payments from kidnapped victims.

“He was positively identified through local intelligence. Once his identity was confirmed, the hybrid forces moved swiftly and neutralised him before he could escape,” one source disclosed.

Security sources described Sani Yellow as one of the most influential bandit commanders operating within the forests spanning Anka, Bukkuyum, Maru and neighbouring local government areas of Zamfara State.

He was allegedly responsible for coordinating repeated attacks on rural communities, organising large-scale kidnappings for ransom, rustling livestock and leading violent raids that displaced thousands of residents across the North-West.

Community sources further alleged that Sani Yellow routinely subjected kidnapped victims to severe abuse and reportedly ordered members of his gang to sexually assault female captives whose families were unable to raise ransom payments.

Sani Yellow was reported to be related to the late Kachalla Yellow Danbokolo, another notorious North-West bandit commander who was reportedly killed in 2025 alongside more than 170 of his fighters during a major operation conducted by the Shinkafi Yan Sakai Volunteer Forces.

Security analysts believe the latest development represents another significant setback for criminal networks operating across Zamfara, Katsina and parts of Sokoto States.

A senior defence intelligence source, who spoke to PRNigeria on condition of anonymity because he was not authorised to comment publicly, confirmed that security agencies were monitoring developments following Sani Yellow’s reported killing.

According to the source, troops have heightened surveillance across affected communities to prevent possible retaliatory attacks by members of the deceased commander’s gang.

“The security architecture is already on alert. Necessary deployments have been made to protect vulnerable communities and respond promptly to any attempted reprisal,” the source said.

Security experts believe the reported elimination of Sani Yellow could weaken bandit operations in parts of Zamfara if sustained intelligence-driven operations continue against remaining criminal leaders.

However, they caution that such operations often trigger reprisals by surviving gang members, underscoring the need for heightened vigilance across the region.

Continue Reading

Trending

Maduka College Advert