CISLAC Boss Suggest Ways To Navigate Nigeria out of Debt
Maryam Aminu
Nigeria faces significant challenges in managing its debt burden amidst competing demands for scarce resources.
The Civil Society Legislative Advocacy Centre (CISLAC), has recognized the critical nature of the country’s fiscal crisis marked by a consistent decline in federal government’s revenue over the past half a decade.
CISLAC faulted the fiscal crisis to the government’s over reliance on unsustainable debts which is perpetuated by unrealistic/over bloated budgets,weak revenue mobilization efforts, misplaced spending priorities and a lack of transparency and accountability in public finance management
The Executive Director, CISLAC, Auwal Ibrahim Musa Rafsanjani made this known on Wednesday 3rd March, 2024 in Lagos during a media presentation of Research On Tax Expenditure and Debt Management with support from Christian Aid UK, Nigeria.
Rafsanjani expressed that there must be sincere demonstrations in the government’s commitment to addressing Nigeria’s pressing fiscal challenges, encompassing tax expenditure, debt management, revenue mobilization, and the prioritization of spending.
The CISLAC Boss reiterated the need for the government to recognize the urgency of adopting a holistic approach to debt management that balances the need for borrowing with the imperative of debt sustainability.
He also emphasised the urgent need for the National Assembly to rigorously scrutinise loan requests, ensure compliance with the law and alignment with the interests of the Nigerian public.
Rafsanjani expressed that compounding Nigeria’s fiscal woes are significant revenue losses attributed to tax expenditures, encompassing incentives, exemptions, credits and waivers.
Referencing the 2021 Tax Expenditure Statement (TES), he said revenue foregone due to tax expenditures accounted for approximately 4% of GDP, equating to N6.8 trillion.
He noted that the alarming trend is evidenced by substantial shortfalls in revenue, with deficits ranging from 31% to as high as 50% in the years spanning 2018 to 2023.
Concurrently, Nigeria’s overall debt burden has skyrocketed, reaching a staggering N97.34 trillion in the fourth quarter of 2023 from N87.9 trillion ($114.3 billion) as of June 2023.
While Nigeria’s debt profile continues to grow, and it allocates most of its budget revenue to debt servicing at the expense of investing in more critical social sectors and infrastructural development, there has been a wide consensus around the reasonability/sincerity of purpose behind external borrowings, the increasing role of private creditors in Nigeria’s debt crisis and lack of accountability mechanism in utilisation of loans for the purpose for which they were granted/taken.
This substantial leakage of revenue underscores the urgency of addressing tax expenditure and debt management issues with utmost priority.
“In response to these multifaceted challenges, the Civil Society Legislative Advocacy Centre and the Tax Justice and Governance Platform with support from Christian Aid Nigeria through an ongoing Debt Justice campaign, have undertaken several sensitisation engagements with civil society and media as well as policy engagements with relevant state actors, most of which have been informed by our research on tax expenditures and its implications on debt management and sustainability in Nigeria.” He disclosed
The Civil Society Legislative Advocacy Centre appealled for the conduct of thorough assessments of existing tax incentives to identify areas of inefficiency, duplication, or inequity.
CISLAC called for the engagement of stakeholders, including government agencies, private sector representatives, and civil society organizations, to solicit input and expertise in the reformulation of tax policies as well as promotion of transparency and accountability in the administration of tax expenditures, including regular reporting and evaluation mechanisms to assess the impact of revenue generating organizations and their economic outcomes
He further suggested Investigating the movement and spending of loans received by the Federal Government in the past and present administrations, including but not limited to the $3.4 billion loan obtained from the International Monetary Fund (IMF) as reported in the 2020 annual audited report published last week by the Auditor-General of the Federation.
Other suggestions include
” Revising legal and institutional frameworks related to debt management, emphasizing transparency and accountability. This includes empowering bodies like the Fiscal Responsibility Commission and the Debt Management Office to enforce laws and regulations.
Enhancing oversight of government borrowing activities to ensure transparency, accountability, and adherence to fiscal discipline.”
“Strengthening debt sustainability assessments to assess the affordability and risks associated with new borrowing initiatives.Exploring innovative financing mechanisms and debt restructuring options to alleviate debt pressures and create fiscal space for priority investments in infrastructure, human capital, and social services.”
“Reviewing and updating tax laws to improve efficiency, equity, and revenue generation.
Closing loopholes and addressing tax evasion and avoidance through robust enforcement mechanisms.”
He further suggested promoting investment-friendly tax policies that stimulate economic growth and job creation.
“We believe that governments at all levels need to acknowledge the critical importance of formulating, implementing and monitoring fiscal policies that are technically sound, widely acceptable and administratively feasible.”
“By harnessing the collective expertise and insights of all relevant stakeholders, we are confident that we will navigate the complexities of Nigeria’s fiscal landscape and chart a course towards sustainable economic growth and development with transparency, accountability, and fiscal prudence as guiding principles.” Rafsanjani addd
Maryam Aminu
Nigeria faces significant challenges in managing its debt burden amidst competing demands for scarce resources.
The Civil Society Legislative Advocacy Centre (CISLAC), has recognized the critical nature of the country’s fiscal crisis marked by a consistent decline in federal government’s revenue over the past half a decade.
CISLAC faulted the fiscal crisis to the government’s over reliance on unsustainable debts which is perpetuated by unrealistic/over bloated budgets,weak revenue mobilization efforts, misplaced spending priorities and a lack of transparency and accountability in public finance management
The Executive Director, CISLAC, Auwal Ibrahim Musa Rafsanjani made this known on Wednesday 3rd March, 2024 in Lagos during a media presentation of Research On Tax Expenditure and Debt Management with support from Christian Aid UK, Nigeria.
Rafsanjani expressed that there must be sincere demonstrations in the government’s commitment to addressing Nigeria’s pressing fiscal challenges, encompassing tax expenditure, debt management, revenue mobilization, and the prioritization of spending.
The CISLAC Boss reiterated the need for the government to recognize the urgency of adopting a holistic approach to debt management that balances the need for borrowing with the imperative of debt sustainability.
He also emphasised the urgent need for the National Assembly to rigorously scrutinise loan requests, ensure compliance with the law and alignment with the interests of the Nigerian public.
Rafsanjani expressed that compounding Nigeria’s fiscal woes are significant revenue losses attributed to tax expenditures, encompassing incentives, exemptions, credits and waivers.
Referencing the 2021 Tax Expenditure Statement (TES), he said revenue foregone due to tax expenditures accounted for approximately 4% of GDP, equating to N6.8 trillion.
He noted that the alarming trend is evidenced by substantial shortfalls in revenue, with deficits ranging from 31% to as high as 50% in the years spanning 2018 to 2023.
Concurrently, Nigeria’s overall debt burden has skyrocketed, reaching a staggering N97.34 trillion in the fourth quarter of 2023 from N87.9 trillion ($114.3 billion) as of June 2023.
While Nigeria’s debt profile continues to grow, and it allocates most of its budget revenue to debt servicing at the expense of investing in more critical social sectors and infrastructural development, there has been a wide consensus around the reasonability/sincerity of purpose behind external borrowings, the increasing role of private creditors in Nigeria’s debt crisis and lack of accountability mechanism in utilisation of loans for the purpose for which they were granted/taken.
This substantial leakage of revenue underscores the urgency of addressing tax expenditure and debt management issues with utmost priority.
“In response to these multifaceted challenges, the Civil Society Legislative Advocacy Centre and the Tax Justice and Governance Platform with support from Christian Aid Nigeria through an ongoing Debt Justice campaign, have undertaken several sensitisation engagements with civil society and media as well as policy engagements with relevant state actors, most of which have been informed by our research on tax expenditures and its implications on debt management and sustainability in Nigeria.” He disclosed
The Civil Society Legislative Advocacy Centre appealled for the conduct of thorough assessments of existing tax incentives to identify areas of inefficiency, duplication, or inequity.
CISLAC called for the engagement of stakeholders, including government agencies, private sector representatives, and civil society organizations, to solicit input and expertise in the reformulation of tax policies as well as promotion of transparency and accountability in the administration of tax expenditures, including regular reporting and evaluation mechanisms to assess the impact of revenue generating organizations and their economic outcomes
He further suggested Investigating the movement and spending of loans received by the Federal Government in the past and present administrations, including but not limited to the $3.4 billion loan obtained from the International Monetary Fund (IMF) as reported in the 2020 annual audited report published last week by the Auditor-General of the Federation.
Other suggestions include
” Revising legal and institutional frameworks related to debt management, emphasizing transparency and accountability. This includes empowering bodies like the Fiscal Responsibility Commission and the Debt Management Office to enforce laws and regulations.
Enhancing oversight of government borrowing activities to ensure transparency, accountability, and adherence to fiscal discipline.”
“Strengthening debt sustainability assessments to assess the affordability and risks associated with new borrowing initiatives.Exploring innovative financing mechanisms and debt restructuring options to alleviate debt pressures and create fiscal space for priority investments in infrastructure, human capital, and social services.”
“Reviewing and updating tax laws to improve efficiency, equity, and revenue generation.
Closing loopholes and addressing tax evasion and avoidance through robust enforcement mechanisms.”
He further suggested promoting investment-friendly tax policies that stimulate economic growth and job creation.
“We believe that governments at all levels need to acknowledge the critical importance of formulating, implementing and monitoring fiscal policies that are technically sound, widely acceptable and administratively feasible.”
“By harnessing the collective expertise and insights of all relevant stakeholders, we are confident that we will navigate the complexities of Nigeria’s fiscal landscape and chart a course towards sustainable economic growth and development with transparency, accountability, and fiscal prudence as guiding principles.” Rafsanjani addd
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