The Civil Society Legislative Advocacy Centre (CISLAC) and Tax Justice and Governance Platform, has raised the alarm that Nigeria is facing a critical economic challenge, marked by a substantial allocation of its revenue towards debt servicing.
Executive Director of CISLAC, Auwal Musa Rafsanjani said that debt service is allotted N8.25 trillion and the president ambitiously projects debt servicing at 45 per cent of total income.
He urged the Nigerian government to reduce its dependency on international and especially private creditor borrowings.
While briefing newsmen in Abuja on Friday on “Addressing Nigeria’s Fiscal Challenges and Public Debt Management’’ organised by CISLAC and Tax , Rafsanjani said borrowing account for about 60 per cent of the annual debt servicing cost and prioritises concessional loans, in adherence to legal stipulations.
He said that the current economic situation in Nigeria, characterised by dwindling government revenues and escalating public debt, demanded immediate and strategic interventions.
He said that as of Dec. 2022, 80 per cent of Nigeria’s total revenue was dedicated to that purpose.
“The new government on its part has commended itself for allocating more funding to social services in its 2024 budget.
“However, the country will spend six times more on servicing debts than on building new schools and hospitals in 2024.
“In its N28 trillion 2024 budget, the pattern of bloated recurrent spending new borrowings and unsustainable debt servicing costs still persist.’’
He said that the government’s persistent reliance on borrowing and the loss of substantial revenue through tax expenditures have compounded these challenges.
Also speaking, Executive Director, Extractive 360, Juliet Ukanwosu said the Ministry of Finance, Budget and National Planning, and related agencies should enhance revenue generation by expanding the tax net, improving tax compliance and revising tax incentives.
Ukanwosu said that exploring revenue streams such as carbon taxes, in line with progressive taxation principles would further augment government income.
“Review all the existing tax expenditures and criteria for such benefit including but not limited to Pioneer status, contribution to economy.
“Remove the power to grant tax expenditures from the Minister of Finance or the Executive and only place a duty on the Executive to document the recommendations, proposals and justification for tax expenditure subject to the approval of the legislature.
Also, the Executive Director, Support Training Entrepreneurship Programme, Mr Harry Udeh , ,said that the CSOs believed that the principles of transparency and accountability should be the guiding principle in the administration of tax expenditure.
Udeh said that the tax justice platform called for the need for annual budgets to be accompanied by a tax expenditure statement that detail the above analysis.
