The continued dependence on allocation from the Federation Account is no longer sustainable due to dwindling crude oil sales revenues, Minister of Budget and National Planning, Udo Udoma, has said.
The minister who was speaking at a two-day national workshop on alternative sources of revenue for sustainable development in states and local governments in Abuja on Monday said the federal government’s efforts to diversify the country’s economy was the only way to boost the revenue generating activities of states and local governments.
“It was for the purpose of shoring up liquidity levels and ensuring the continuous provision of critical services and obligations pending improvement in revenue flows that the federal government initiated a series of programmes with the States in 2016,” the minister said.
The workshop organised by the Revenue Mobilization Allocation and Fiscal Commission, RMAFC, is aimed at discussing alternative sources of revenue generation to foster sustainable growth and development of the country.
Noting the commitment of the government in the pursuit of the objectives of the economic diversification initiatives, Mr. Udoma said states and local governments must exploit areas of their comparative advantage to promote economic diversification for enhanced revenue generation, job creation and improved livelihood for their people.
Represented at the workshop by his Special Adviser, Bassey Akpanyung, the minister said he was glad about the relative fiscal stability the interventions have so far brought to the states, although he said a lot more still needs to be done.
He said the workshop was to enable government track the achievements so far by the states and local governments, pointing out that these have diverse, but untapped opportunities to generate significant internal revenues through economic diversification.
”All emerging sectors in the states and local governments with potentials to help realise the benefits of diversification include agriculture, solid minerals, tourism, entertainment, arts and culture,and ICT.”
Beyond ramping up internal revenue generation capacity, the minister said the states and local governments must equally pay attention to efficient utilisation.
“The ideals of fiscal sustainability, accountability and transparency demands that we avoid wasteful spending of our scarce resources, plug all identified leakages from our system, and channel the funds properly towards delivering the common goods to the people,” he said.
He said it was logical to argue that citizens would be more willing and committed to pay their taxes when public resources were seen to be better managed than otherwise.
Equally, if government expected the people to pay their taxes, it must also deliver on expectations, the minister said.
Circumstances that led to the current harsh economic conditions, he noted, resulted from the abandonment of the non-oil revenue generating sources and surrendering to the fortunes of crude oil revenue earnings.
“Today, sadly, we are paying heavily for the many years of neglect and failure to diversify the country’s revenue sources away from crude oil,” he added.
“The path to change usually comes through tough choices and decisions. Nigeria has come to that point where making such choices with regard to the country’s economic survival has become imperative.
“Indeed, the time has come for us to embrace the various opportunities outside the oil sector in response to the current changing realities, to achieve sustainable growth and development,” the minister said.