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Nigeria’s tax reform committee proposes daily revenue-sharing between govt tiers

Published

6 months ago

June 4, 2024

The three levels of government in Nigeria will begin receiving allocations daily instead of monthly, according to plans announced by the Presidential Fiscal Policy and Tax Reform Committee.

Taiwo Oyedele, the committee’s chairman, made the revelation on Monday during a workshop for public consultation in Abuja where he emphasized the necessity to update the existing system, comparing it to outmoded customs that date back to 1814. In contrast to the customary monthly allocation sessions, FAAC will implement a daily payment method under the proposed change.

“We believe the system can be configured to credit the accounts of local, state, and federal governments daily,” Oyedele stated.

He disclosed that the Accountant General of the Federation is among the important players that support the proposed reform. He emphasized further that the change is intended to simplify operations by shifting the monthly FAAC meetings’ focus from routine reconciliations—which may be assigned to junior accountants—to national budgetary policies.

In response to questions about Nigeria’s collection expenses, which range from 4% to over 30%, Oyedele emphasized that “if an agency cannot collect revenue at 1%, it should not be collecting it at all.”

We are serious with the one per cent and it should cut across everybody, if you cannot collect revenue with one per cent, then you should not be collecting it at all. That’s why we were saying let government agencies focus on the primary reason they were set up for.”

He added, “If they are not set up to collect tax, they can’t be efficient and competent in doing it. Things will work better if everybody plays to their strength there’s a reason why every country has their revenue collection agency and not to replicate that function and expect that everything will be fine. A country like South Africa is under one per cent.”

This is an attempt to modernize the Federation Account Allocation Committee’s funding system.

Revenue sharing has been a critical subject in Nigeria’s federal system. Theoretically, resources are controlled by generating units and a higher sum of revenue is allocated to the generating sources under the current sharing arrangement however, the federal government takes 52.68% of the revenue sharing, states get 26.72% while local governments get 20.60%. The arrangement points to strong power and resource concentration in the central government, a situation that has fueled various agitations by different entities in the Nigerian state.

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IMF mission concludes 4th loan program assessment in Egypt

Published

1 hour ago

November 22, 2024

Ifeoluwa Dada

Following the completion of a recent visit to Egypt, the International Monetary Fund (IMF) has announced that its mission had achieved significant strides in policy talks aimed at concluding the fourth review of the IMF loan program.

The review is the fourth in Egypt’s most recent 46-month IMF loan program, which was authorised in 2022 and increased to $8 billion this year following an economic crisis characterised by high inflation and chronic foreign exchange shortages. It may unleash more than $1.2 billion in financing.

Along with reaffirming its commitment to maintain a flexible exchange rate system, the IMF stated that Egypt “has implemented key reforms to preserve macroeconomic stability,” including the unification of the currency rate that facilitated imports.

Earlier on Wednesday, Egypt’s Prime Minister Mostafa Madbouly said Cairo has asked the IMF to modify the targets for the programme not only for this year, but for its full duration, he added without giving more details.

“Discussions will continue over the coming days to finalize agreement on the remaining policies and reforms that could support the completion of the fourth review,” the IMF added in its statement.

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Kenya seeks $750m from World Bank, obtains $200m from AfDB— Official

Published

2 days ago

November 20, 2024

Ifeoluwa Dada

The head of debt management for the finance ministry told Reuters that Kenya had obtained a $200 million loan from the African Development Bank (AfDB) and was negotiating a fresh $750 million loan with the World Bank.

After being forced to abandon proposed tax rises costing more than 346 billion shillings ($2.68 billion) in June due to fatal demonstrations, the East African nation’s administration, which has been grappling with significant debt, has been frantically seeking fresh funding.

The Finance Ministry’s public debt management office director general, Raphael Owino, told Reuters that the IMF’s October clearance of the seventh and eighth reviews, which opened the door for a $606 million loan tranche, had aided the ministry’s talks for more loans.

“The World Bank is coming on board, riding on the back of IMF receipts,” Owino said. “The AfDB is already on board.”

The discussions for more assistance, which came under the World Bank’s “Development Policy Operations” (DPO) with the government, were confirmed by a representative at the organization’s Kenya office.

“The amount of the current (loan) is yet to be determined. The amount will also depend on the implementation of the policy reforms agreed upon,” the spokesperson told Reuters, adding that past DPO loans averaged about $750 million.

In May, the World Bank approved the latest round of DPO loans, totalling $1.2 billion.

According to a statement made last month by Finance Minister John Mbadi, Kenya has set a foreign borrowing goal of 168 billion shillings for the fiscal year ending in June 2025.