‘ Revenue leakages, others compound Nigeria's fiscal crisis'

THE Civil Society Legislative Advocacy Centre ( CISLAC) said that the substantial leakage of revenue has underscored the urgency of addressing tax expenditure and debt management issues with utmost priority.

The group said compound - ing Nigeria's fiscal woes are significant revenue losses attributed to tax expenditures, encompassing incentives, exemptions, credits and waivers.

Giving instances of the 2021 Tax Expenditure Statement ( TES) revenue, accounting for approximately four per cent of gross domestic product ( GDP) and equating to about N6.8 trillion, the group said was foregone due to tax expenditures.

Executive Director, CISLAC, Auwal Musa, said this during a media presentation of research on tax expenditure and debt management, with support from Christian Aid United Kingdom ( U. K.), Nigeria.

Musa, who expressed concern over the country's severe fiscal crisis marked by a consistent decline in federal government revenue over the past halfdecade, said central to this was the government’s over- reliance on unsustainable debts which is perpetuated by unrealistic/ over- bloated budgets, weak revenue mobilisation efforts, misplaced spending priorities and a lack of transparency and accountability in public finance management. He said the alarming trend is evidenced by substantial shortfalls in revenue, with deficits ranging from 31 per cent to as high as 50 per cent in the years spanning 2018 to 2023.

Concurrently, he noted that Nigeria's overall debt burden has skyrocketed, reaching a staggering N97.34 trillion in the fourth quarter of 2023 from N87.9 trillion ($ 114.3 billion) as of June 2023.

The CISLAC chief said while Nigeria’s debt profile continues to grow, allocating most of its budget revenue to debt servicing at the expense of investing in more critical social sectors and infrastructural development, there has been a wide consensus around the reasonability/ sincerity of purpose behind external borrowing and the increasing role of private creditors in Nigeria’s debt crisis and its human costs.

Musa also said the consensus was around the increasing role of private creditors in Nigeria’s debt crisis and its human costs as well as the lack of accountability mechanism in utilisation of loans on the purpose for which they were granted or taken.

In response to the multifaceted challenges, he said CISLAC and the Tax Justice and Governance Platform with support from Christian Aid Nigeria through an ongoing Debt Justice campaign, have undertaken several sensitisation engagements with civil society and media as well as policy engagements with relevant state actors, most of which have been informed by their research on tax expenditures and its implications on debt management and sustainability in Nigeria.