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HomeBusinessNigeria's fiscal stability depends on aggressive revenue drives, says DMO chief

Nigeria’s fiscal stability depends on aggressive revenue drives, says DMO chief

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The Debt Management Office (DMO) of Nigeria emphasizes the necessity of bolstering revenue generation to achieve accelerated socio-economic development and ensure debt sustainability, according to a statement issued by the DMO Director-General, Patience Oniha.

Speaking at a one-day technical roundtable on “Economic Blueprint for President Bola Tinubu’s administration” in Abuja, Oniha acknowledged the recent policies implemented by the Federal Government to prioritize revenue generation as crucial steps towards reducing the country’s debt burden.

“We cannot discuss growth, development, or debt without giving due consideration to revenue. It is now imperative that we confront revenues and take decisive actions to further strengthen our revenue streams from all sources,” Oniha stated.

The roundtable, organized by Actionaid Nigeria in partnership with the Nigerian Labour Congress (NLC) and the Centre for Social Justice (CSJ), focused on measures to propel Nigeria towards sustainable development and address the challenges facing the economy.

Oniha praised certain government initiatives, including the work of the Committee on Revenues set up by the president and the implementation of the economic plan, which led to the removal of subsidy on Premium Motor Spirit (PMS) and the unification of the Naira exchange rates.

“While these actions have yielded immediate benefits, they have also created some pains which the government is trying to alleviate, particularly for the most vulnerable in the society,” Oniha added.

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The DMO Director-General emphasized the need for critical and urgent attention to the country’s economic situation to prevent a deterioration in major economic and social indices. She asserted that the current measures taken were essential to drive Nigeria towards sustainable development, with a focus on increasing employment opportunities and higher income levels.

Regarding the country’s debt stock, Oniha explained that it had grown due to factors like subsidies contributing to budget deficits and the use of official Naira exchange rates, resulting in lower revenue.

However, she clarified that Nigeria’s debt stock to GDP ratio, at below 25 percent, is among the lowest globally. The real issue, she noted, lies in revenue generation, which has not shown significant improvement despite previous efforts.

As part of recent developments, the reversal of certain policies has led to higher revenues for all tiers of government. Notably, in June and July, the funds distributed by the Federal Accounts Allocation Committee (FAAC) were more than N907 billion and N1.959 trillion, respectively, compared to the previous range of N500 billion to N750 billion.

The rise in debt service obligations, primarily resulting from consecutive budget deficits, poses challenges as it consumes a significant portion of Nigeria’s revenues. The director-general urged continued efforts to enhance revenue generation and create a more sustainable fiscal space for the government.

The DMO’s emphasis on revenue improvement echoes the government’s commitment to address economic challenges and foster a path of sustainable development for Nigeria’s future.

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