Decline in oil prices, EndSARS protests worsened our conditions – Govs | Dailytrust

Decline in oil prices, EndSARS protests worsened our conditions – Govs

“Impacts of COVID-19 presents opportunity to strategise”...

Governor Kayode Fayemi of Ekiti State
Governor Kayode Fayemi of Ekiti State

Governors of the 36 States of the federation on Monday said the decline in oil prices that followed the global lockdown and the social unrest that amplified the demands of the #EndSARS protests worsened the country’s economic and social conditions.

The Chairman of the Nigerian Governors Forum (NGF) and Governor of Ekiti State, Dr Kayode Fayemi, said this in his opening address at the 6th annual Internally Generated Revenue (IGR) National Peer Learning Event aimed at deepening the drive for improved domestic revenues at the State-level through effective, efficient, fair and legal tax administration.

Fayemi disclosed that the 2020 half-year year-on-year IGR performance reported a negative growth of 11.7 percent for the 36 States and the Federal Capital Territory (FCT).

The NGF Chairman, however, said that despite the overall decline, some States recorded positive growth.

He stated that three States in the category were Ebonyi, Gombe and Yobe which recorded more than 50% in growth.

He said: “This year has presented us with a perfect storm of difficulties to deal with – from a health pandemic to the second economic recession in five years.

“At the wake of the COVID-19 pandemic, the Forum worked with the federal government, international partners, and the private sector to deliver the necessary response needed to contain the virus and ease out its impact on the lives of our citizens.

“These include the set-up of intervention funds, roll-out of social investment programmes, distribution of palliatives, initiation of tax incentive programmes to protect and support livelihoods and businesses.

“Unfortunately, the decline in oil prices that followed the global lockdown and the social unrest which echoed the demands of the ENDSARS protests further worsened the country’s economic and social conditions for months.

“This exacerbated the already vulnerable fiscal environment for governments at both the national and sub-national level. Other accompanying trends have included rising inflation rate, degrading exchange rate and growing unemployment.

“As we work together to reflate the economy, the need to improve government revenues to adequately service planned expenditures cannot be overemphasized.”

Fayemi said the state governments were currently professionalizing Internal Revenue Services to be taxpayer-centric and responsive to the new normal of digitalizing tax administration.

“We are not canvassing or proposing for new taxes to be introduced but emphasizing the need for our Internal Revenue Services to be more strategic, innovative and pragmatic in administering those taxes, fees, levies and charges that have been legally prescribed for collection across various jurisdictions,” he added.

Embrace right tools in 2021

In her keynote address, the Minister of Finance, Budget, and National Planning, Hajiya Zainab Ahmed, said going by the impact of COVID-19, the revenue outlook for 2021 depended on the willingness of State governments to embrace the right tools, technology and strategies to transform, enhance and strengthen revenue growth and sustainability, and adopt cost optimization plans.

She said the impact of COVID-19 on the economic and fiscal revenue outlook for 2021 presented a significant opportunity for States to strategise and reposition their fiscal revenue management systems for this era called the ‘new normal’.

She added that “fiscal reforms are important now, more than ever, to mitigate against current and future risks, bearing any future pandemics or other global crises.”

The minister, while stating that the Federal Government had embarked on a fundamental strategy that comprises wide-ranging reforms in its tax policies and administration in the last few years, said the Finance Act 2019 and Finance Bill 2020 had brought significant changes and consolidation to tax administration and management in the country.

The finance minister, while speaking on the Strategic Revenue Growth Initiative SRGI), said it is a blueprint and mechanism for enhancing fiscal revenues from 6% to 15% of GDP by 2023.

“With the SRGI, we are partnering with interested State Ministries of Finance and State revenue generating agencies in achieving the set target of attaining revenue to GDP of 15% by 2023….

“We are willing and available to partner with all State governments yet to join us on this transformative journey,” she added.

Earlier in his welcome message, the NGF Director General (DG), Asishana Okauru, said the event started in 2015 after the oil crisis saw government revenues crashing resulting in the country’s economy sliding into a recession in 2016.

Okauru said the aim was to share practical tax reform lessons implemented at the sub-national level to improve domestic resource mobilisation in the country.

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