Nigeria’s Vice President, Professor Yemi Osinbajo, has said the country is going through the most difficult period in her history in terms of finances.
He said all the plans by the federal government to generate revenue have been “badly hit” by the coronavirus and the fall out of the pandemic.
According to him, the country is well behind in terms of revenue target and has witnessed a drop of almost 60% of revenues, making it difficult to meet revenue objectives.
Osinbajo spoke during a webinar where he answered questions from Africa Report editors and participants on Nigeria’s plans to bounce back post-COVID-19.
While the country’s team of world-class health professionals have fended off the worst public health effects of the pandemic, the national economy has been struck by shrinking markets and falling export prices.
Despite slightly stabilized oil prices across the world, the vice president observed that a pressing problem is with very low production and fairly low uptake of oil as many of the world’s economies are yet to open up.
“One of the major consumers of our oil is India and India as you know, is grappling with the pandemic, it’s factories are opening up quite slowly and we naturally have a problem even with offtake of our oil. So revenues are really low and our tax to GDP was somewhere around 6%.
“We ramped that up to about 8% last year, so with what we are seeing now, it’s even more difficult for people to pay taxes than ever before,” Osinbajo said.
The vice president however said the government is giving intervention and support to cushion these effects which he believes will assist Nigerian businesses.
“This is why we are doing everything we are doing, namely, trying to ensure that businesses survive this period by providing as much support as we can, by relieving them of as much burden as possible, especially by way of loans, ensuring that they are able to get some moratorium and allowances so that they can continue to run their businesses.
“Our approach is first to ensure that we save jobs and save businesses. Then we do the best we can in agriculture and do the best we can through the housing scheme.
“If that works, we will actually be able to improve spending and if we are able to improve spending, if we are able to improve money in the hands of people, taxes will definitely improve and if businesses survive taxes will improve, so those are the sort of projections that we have but there is no question at all that in terms of our finances we are going through possibly the most difficult period in our recent history,” Osinbajo stated.