The federal government has expressed optimism that all things being equal, the economy of Nigeria should get back on its feet from the first quarter of next year.
Minister of Finance, Budget and National Planning, Zainab Ahmed, said this when she received officials of the Federal Inland Revenue Service (FIRS) led by its Executive Chairman, Mr Mohammed Nami.
She said the various policies of the government are capable of injecting life into the economy, which contracted in the second quarter of 2020 by 6.1 per cent, according to the National Bureau of Statistics (NBS), which also said yesterday that inflation in August 2020 rose by 13.22 per cent.
Nigeria was faced with twin shocks this year and they came from a decline in the prices of crude oil and the global health pandemic of COVID-19, which forced a shutdown of the economy in Q2 2020.
The gross domestic product (GDP) is anticipated to decline again in the current third quarter despite the gradual reopening of economic activities in the country.
If the GDP records another negative growth in Q3 2020, Nigeria will officially fall into a recession like South Africa. It would be the second economic slip under the present administration of President Muhammadu Buhari.
Though the Buhari-led government wants to avoid this disaster, it is looking inevitable because of the effect of COVID-19 on the economy and Nigeria is not alone in this.
Speaking with her guests during the courtesy visit to her office in Abuja, the Finance Minister said, “We are expecting by the first quarter of 2021, we shall be okay.”
She charged the tax agency to do more in terms of generating revenue for the nation, reminding FIRS that there are other government obligations and debt servicing which requires revenue to fund “and we can see that the capacity to do more is there and we expect you to do more.”
“I also want your team working on the Finance Act to double their efforts. I want to remind you that we are an enabler for you. So, feel free and update us so that we can deal with your challenges,” she implored the team.
Mrs Ahmed commended the tax body for its revenue performance despite the decline in oil revenue, saying it has remained resolute as both Value Added Tax (VAT) and stamp duty have helped in boosting earnings.
According to her, the efforts at diversifying revenue sources have been a blessing, noting that the pandemic has not impacted much, especially in Nigeria because of the proactive measures taken by the government especially in the health sector.
In his remarks, the FIRS chief, Mohammed Nami, thanked the Minister for her support for the agency, assuring her that they would do all their best “to provide food for FAAC (Federation Account Allocation Committee allocation) through revenue generation.”
Mr Nami said the FIRS has been contributing up to 70 per cent of the FAAC allocation in the last three to five months, thanking the Minister for keeping the economy buoyant, despite the challenges.