Nigerians live worse than before, says Okonjo-Iweala

 

With the new recalculation of Nigeria’s GDP, the Federal Government has warned Nigerians not to jubilate because what the rebasing figures have thrown up means Nigerians “live worse than before.”
The Minister of Finance and Coordinating Minister for the Economy Dr Ngozi Okonjo-Iweala sounded this note of caution yesterday in Abuja at the inauguration of the Federal Inland Revenue Services (FIRS) multi-disciplinary training centre.
According to Dr. Okonjo-Iweala, “we live worse than before. Those who want to think that we just need large GDP to live well, is not true because, by this ratio, it doesn’t look so good.”
The ratio she was referring to was the tax revenue to GDP ratio that is contained in the rebased figures of the GDP. Nigeria’s new GDP figures saw tax revenue to GDP ratio declined to
about 12 per cent and four per cent for non-oil tax to revenue as against the pre-rebasing figures of 22 per cent for tax to GDP ratio and seven per cent for the non oil tax revenue to GDP ratio.
She stated that “Nigeria is confronted with many constraints when attempting to increase tax revenues. We have just celebrated the fact that Nigeria has now become the largest economy in Africa with N80 trillion of GDP ($509.9bn), which makes us the 26th largest economy in the world and advances us on our goal to become one of the 20 largest economies in the world. But I want to tell you that there is one piece of the news that is not so cheering. With the increase in GDP, all our revenue ratios have been recalculated.”
To the tax collectors, she directed that “for tax revenue to GDP, we now have to redouble our efforts to get back to the 20 per cent ratio at least that we were before and I want all of us to rise up to the challenge with the continuous improvement on the capacity of tax official through training in the modern method of auditing of companies.” Dr. Okonjo-Iweala then instructed the Federal Inland Revenue Services (FIRS) to increase Nigeria’s tax revenue to GDP ratio to 20 per cent. Earlier in his address, the Acting Chairman of the FIRS, Alhaji Kabir Mashi, disclosed that the training institute, which was built at a cost of N800m, would be upgraded to a full-fledged department to be headed by a director, and the training centre would be made available for taxpayer’s education.