Mkpoikana Udoma
Port Harcourt — The Tax Justice and Governance Platform has charged the National Assembly to demand from President Bola Tinubu accountability for petrol subsidy savings, and also investigate the spending of loans received by the Federal Government in the past and present administrations.
The economic justice group also tasked the Legislature to stop the Executive from borrowing for recurrent expenditure (personnel and overheads) and dilatory capital expenditure that adds no value to economic growth, wealth creation and development.
The group in a media briefing titled, “Nigeria’s Economic Challenges and Public Debt Management” said federal government’s revenue has continuously declined in the past five years, thus creating budget deficits and debt crisis that has grown the nation’s external debt by 1,333% standing at N87.9trillion ($114.3billion) in June 2023 and would climb to N107.38 trillion before end of 2024.
The Lead, Rivers State Tax Justice and Governance Platform, Mr. Amaechi Kelechi Justin, explained that the country was currently in dire revenue situation, orchestrated by the escalating debt burden, hence failure to act quickly could result in an additional 23 million Nigerians living in poverty and 80 million working-age citizens without a full-time job by 2030.
Justin said the trends, which he described as concerning, underscore the need for the National Assembly to urgently commit to sound reforms and balanced resource allocation, thereby paving the way for significant investment in critical sectors that directly impact the lives of vulnerable Nigerians.
He stated that the National Assembly, as stewards of the nation’s economic well-being, must acknowledge the critical importance of exercising their mandate towards steering the nation back on the path of economic recovery, stability and prosperity.
The group further urged federal lawmakers to introduce appraisal mechanisms that ensure budget performance is a reflection of the value created and not indication of funds released to MDAs, as well as strengthening debt sustainability assessments through public debt review mechanisms to assess the affordability and risks associated with new borrowing initiatives.
Amongst other things, the group wants the National Assembly to strengthen debt management, enhance revenue mobilization, plug leakages and prioritize government spending by, “Demanding accountability for petrol subsidy savings and sincerity of purpose in fulfilling the government’s “promises of renewed hope” to the millions of Nigerians who no longer have belts to tighten.
“Investigating the movement and spending of loans received by the Federal Government in the past and present administrations, including but not limited to the $3.4 billion loan obtained from the International Monetary Fund as reported in the 2020 annual audited report published last week by the Auditor-General of the Federation.
“Revising legal and institutional frameworks related to debt management, emphasizing transparency and accountability. This includes accelerating the amendment of the Fiscal Responsibility Act 2007.
“Redefining the purpose of incurring debts in clear terms of debts being for projects that will promote value chain development, improve the macroeconomic framework, develop infrastructure, and build strategic human capital. This will imply a deletion of the amendment in the 2021 Finance Act which introduced an omnibus new term called “national interest” as a justification for borrowing.
“Prioritizing spending on policies and programs that will directly affect the general public, especially the low-income earners, such as investing heavily in education, health care, agriculture and future-proof empowerment programmes in a transparent, accountable and sustainable manner.”
The group also urged the National Assembly to reduce the discretionary powers of executive institutions with statutory mandates and powers to regulate tax incentives and ensuring that granting of major incentives go through parliament.
“Harmonizing tax laws and rates to reduce overlaps and inconsistencies, eliminate multiple taxation and improve tax revenue mobilization. Nigeria should adopt a comprehensive approach to taxation which categorizes taxes to income, consumption and property tax.
“Revising and harmonizing tax incentive frameworks that provide for clarity of policy goals of incentives, the periodic assessment and monitoring of tax incentives using a monitoring and evaluation framework, assessment of cost-benefit and distributional impact, and guidelines for timely reporting of tax expenditures.
“With 27% of the country’s average household budgets dedicated to fuel-related expenses (petrol-powered generators and vehicles and heavy reliance on the poor public transport system), appropriation of revenue and reallocation of subsidy savings should also prioritize fixing the power and transport sectors.”