The Nigerian economy is currently in dire straits as the Naira has fallen by over 50 percent and revenue generated from oil, the mainstay of Nigeria’s foreign earnings, is at its lowest in the last two decades. This has led to macroeconomic spillovers and the consequent quest for a diversification of the Nigerian economy. Indeed, Buhari did not create these problems, but as the President of Nigeria it is his duty to put measures in place to tackle some of the challenges plaguing the economy.
Detailing its plans, the federal government expects to generate N3.38tn ($17bn), this year, from non-oil sources and this revenue will be used to fund a larger part of the budget. While oil may be our biggest source of revenue, looking at the current economic situation, it may be wise to explore other options.
Here are a few ways to generate significant revenue from non-oil sources:
Taxes
While the government owes it as a duty to enable the citizens by providing jobs, infrastructure etc. The citizens are usually expected to requite by performing their own obligations, which includes paying taxes.
The new reality, considering the present situation in Nigeria, is that at all levels, the government will have to raise the bar by deepening and expanding its tax collection drive through an aggressive tax system, considering the dwindling revenue profile as a result of the drop in oil prices. Therefore, Nigerians have to come to terms with this present harsh reality. Taxes come in different forms, ranging from personal income tax, companies income tax and value added tax amongst others. Our Value Added Tax, which is the lowest in the world, can be doubled, generating another $3billion for the revenue profile.
The informal sector, which makes up almost half of our GDP, has to be taxed and if this is properly done, our tax revenue this year could increase by 33 percent.
With aggressive tax laws and enforcement, there is no doubt that Nigeria can surmount the shocks of the uncertainties in the oil market. What this means is that there will be bigger revenue available for the government to cater to the needs of the Nigerian people, making this the best time for Nigerians to welcome the tax system. Through this method, Nigerians can be involved in the contributory social contract by paying their taxes regularly.
Restoring the power, health and education sector to boost investment
In order to accrue revenue from the non-oil sector, the government needs to tackle electricity issues throughout the country. This will help attract global investments for massive industrialisation, which will subsequently increase our internally generated revenue. In a similar vein, the Buhari administration should revamp and carry out major reforms in our education and health care systems so that our tertiary institutions will churn out graduates who will be employers of labour instead of going abroad looking for better opportunities.
If the health system is revamped, worthy services will be rendered to Nigerians, the productive capacity of our human resources will be optimised and life expectancy will increase.
Similarly, good road infrastructure should be built and existing ones properly maintained to facilitate inter-state commerce and mobility.
If President Buhari and his administration are able to implement all of these changes, then we can be sure to make a robust revenue from the investments.
Recovering looted funds
In the meantime, funds looted and stashed in foreign accounts should be recovered by the federal government, these stolen monies run in billions of dollars, which is enough to sustain an economy for a couple of years.
Buhari, who must have thought in this line, just recently asked the United States for help in returning stolen Nigerian assets stashed in American banks. In March, the US said it had frozen more than $458 million which the late military ruler, Sani Abacha, had stolen.
The stolen funds recovered should be used to rebuild other dying sectors in the economy such as the manufacturing and mining sectors.
