Nigeria’s revenue generation too low - IMF

The International Monetary Fund (IMF) has said Nigeria currently has one of the lowest rates of revenue in the world.

The IMF said this is particularly so because of the drop in oil prices and poor revenue base in no oil sectors.

Oya Celasun, the Division Chief, Research Department of the IMF gave the indication during the public presentation of the 2029 World Economic Outlook at the ongoing World Bank/ IMF annual meetings in Washington DC.

Nigeria has been battling with budget deficits year on year even as it funds almost half of annual budgets on borrowings - locally and internationally.

The FG based on the 2019 budget should borrow at least N1.92trn or more as the Minister of Finance, Budget and National Planning, Mrs. Zainab Usman during the 2020 budget breakdown and update on 2019 budget performance said FG can’t achieve 80 percent budget performance.

The FG also projected to raise N7trn to fund the N8.92trn 2019 budget. The FG has raised just N2.04trn revenue as at September 2019. Already the 2019 has a deficit of N1.35trn. For year 2020, out of the N10:33trn, the FG hopes to raise a tall N8.155trn, an amount industry watchers say its not possible. That represents a deficit of over N2trn.

The IMF also said per capital income for Nigeria still remains largely weak.

IMF also said the CBN forex restriction is limiting foreign investments into the Nigeria’s economy.

The IMF also noted that though there was a slight positive growth projection for Nigeria this year but not sufficient to turn per capital growth into positive.

There was slight upward review for growth this year, the IMF said, adding that the growth came mostly from strong agricultural production early in the year but not quite enough to turn per capital growth into positive.

Recall the IMF in it’s Article Four report last week said “Growth is expected to pick up to 2.3 percent this year on the strength of a continuing recovery in the oil sector and the regaining of momentum in agriculture following a good harvest.