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Tuesday, October 4, 2022

Personality: AUWAL MUSA RAFSANJANI– One Man’s Mission for a Better Nigeria

Rafsanjani.

The socio-economic development of any nation is primarily determined by the effciency of its public fnance management systems, which involves raising revenue, managing expenditure, and debt portfolio while effective public fnance management systems promote good governance, human development, and
poverty reduction.

Against this backdrop, Civil Society Legislative
Advocacy Centre (CISLAC), with support from OXFAM Nigeria held a one-day dialogue in Lagos on policy gaps and alternative in fscal transparency.  The Executive Director of CISLAC, Auwal Musa Rafsanjani, felded questions from Funke Olaode.

What motivated the recent dialogue on fiscal transparency and good governance by CISLAC?

The Nigerian economy like the rest of the world has been faced with disruptions to its supply chain and productivity from the need to comply with lockdown guidelines following the COVID-19 pandemic.

With the resultant crash in oil prices which is the mainstay of the Nigerian economy and capital fight which threaten to push the economy into recession, the government, agencies, and market regulators have adopted measures to cushion the impact of the crisis as well as stabilise markets and the economy.

With the severe impact of COVID-19 on the private sector, the government mobilized support for small and medium-scale businesses through fscal measures and the development of an Economic Sustainability Plan (ESP).

The ESP which incorporates the Economic Recovery and Growth Plan (ERGP); the report of the Economic Crisis Committee; the Finance Act
2019; and the Central Bank of Nigeria (CBN)
intervention, is to be funded from Special FGN
Accounts, the CBN in the form of structured
lending, external bilateral/multilateral
sources and to the least extent from other
funding sources.

It is however imperative to strike a delicate balance between the fscal measures for supporting and sustaining small businesses and the economy, and a means to mobilize revenue to fulfll the robust goals of the ESP and the country’s budget.

It is to this end that the Civil Society Legislative
Advocacy Centre (CISLAC), the national
chapter of Transparency International (TI-Nigeria), took the initiative with support from OXFAM under the Strategic Partnership-Financing for Development project, to develop a Public Finance Management Roadmap report in Nigeria to help articulate the ideal public finance model that is workable in Nigeria, acceptable and beneficial to Nigerian citizens.

While acknowledging the auspicious
timing of this fiscal roadmap, it represents a
complementary contribution to the Federal
Government’s efforts within the Economic
sustainability plan and satisfactory budget
implementation.

In the face of unstable economic situation and inadequate funds, what feasible options are available for Nigeria?

Many options are available if we can tap into them. There are unremitted and uncollected
taxable funds. The government should expedite
actions in collecting those funds. Oil companies
are there and many mega-companies are not
paying taxes.

And then we can also block leakages and increase taxation in some areas because there are viable sectors where the government is not paying much attention such as the maritime sector, in the extractive sector and so many areas that Nigeria has neglected.

In my own view, instead of borrowing money,
agencies saddled with revenue collection
should wake up to their responsibilities. Again, what of the looted funds that have been repatriated back into the country? What has the
government done with it?

Everyone knows that oil in Nigeria is becoming unreliable, the NEITI Reports had clearly brought out so many companies both in public and private sectors that are supposed to remit money to the Nigerian government and they have refused to do that over the years.

Also, we have witnessed so many companies dubiously coming to seek for tax holiday or tax waiver and there was no concrete system in place to ensure that they are actually in distress. And after the tax holiday or waiver elapses the same people will come back disguise under a new name.

That is why as a group we have been clamouring for Beneficial Ownership Register so that we can identify the people behind these companies. Ineffectiveness has been identified as one of the factors militating against public
finance in Nigeria.

How do you think this problem can be tackled for the country to be able to meet its development agenda?

These factors are everyday occurrences
such as poor domestic resource mobilization,
obsolete laws, and regulations, weak public
institutions, low tax revenue, corruption
and leakages in the public procurement
process, over-dependence on oil revenue
with a high level of market volatility. I can go in and on.

Everybody knows that many developed countries rely on tax to drive their economies. But here, there is a gap in Nigeria’s tax projection with only six percent of Nigerians paying. Ghana has an 18 percent ratio. It means many Nigerians don’t pay while those who volunteer to pay cannot see how the money is being spent.

The problem is not refected in the developmental projects as often fnd their ways into private pockets. The government should embark on critical reforms of the Nigerian tax system, strengthen tax administration, and ensure progressive tax structure with the view to expanding the tax base of the country and scope to bring more taxable people and business into the tax net.

How do you think government through
its agencies can increase its tax revenue?

It is simple. The government should implement progressive taxation and ensuring that rich persons and companies pay these taxes, expand the tax base by bringing more taxable Nigerians into the tax net through effective reforms, increase tax compliance by rich individuals and companies such as payment on offshore hidden properties and lastly by strengthening anti-tax evasions and avoidance policies, transfer pricing legislation and measures against tax havens. Reshaping public expenditure is key to
meet the development agenda of any nation.

How do you think the government can
achieve this?

Well, there is a need for the government to
adopt participatory budgeting systems that allow for the needs and aspirations of the citizens to be capture in the budgeting process because active citizens’ participation at all stages of budgeting ensures open budgeting and allows for effective budget implementation.

Also, setting realistic budget goals is key. And lastly, it is advisable for any government to prioritizing capital spending because, with improved revenue, there is a need to improve capital spending to drive real economic growth.

I believe any government that wants to achieve real economic and developmental growth as a matter of policy will concentrate and increase public spending to develop infrastructure in education, health, and other critical sectors. Various recommendations have been made on how improved finance management can help develop Nigeria.

In your own view, what do you think can
work best?

Well, our recommendations or roadmap at the recently held dialogue on Wednesday,
July 29, 2020, centered around three things. We believed for effective fnancial management,
an inclusive public fnance framework is
very key which means the government at
all levels should develop an inclusive public
fnance framework with a clear resource
mobilization plan that looks beyond oil
revenue.

The framework should make provision for the diversifcation of oil revenue beyond sales of crude oil and other accruable rent. More importantly, there is a need for Nigeria crude products to be refned locally, and that entails ensuring holistic overhaul of the nation’s four refneries to function in full capacity and possible building of new ones.

This will prevent the loss of huge resources
due to crude oil swapping. Also, the FG
should ensure the effcient management of
the extractive sector by ensuring the passage,
assent, and functioning of the Petroleum
Industry Government Bill as well as the other
components, particularly the Petroleum
Industry Fiscal Bill.

This will bring an end to the porous resource mobilization and management regime that dominate the oil industry. Due to obsolete laws and Memorandum of Understanding (MoU),
Nigeria had not been able to harness the
potential of its oil tax revenue.

There is a need to review all the MoU governing
Nigeria oil sector relationships and tax
agreement. And as mentioned earlier, the
overhauling of the Nigerian tax system for
effciency is also important.

Lastly, a lot of economic revitalizations need to happen which can also be achieved if a focused
economic management team is put in place. This team will be able to galvanize the
economy, energize the economy to create
jobs, be able to provide the right policy that
can drive the economy.

As it is now, a lot of factories and companies are closing down because the electricity is failing, the corruption in the system is becoming overwhelming for them to bear. They cannot meet their targets because of extortion, poor infrastructure, and energy to be able to carry out factory activities.

For me, government at all levels should wake
up to their responsibilities by focusing on
governance, this is the only way Nigeria can move forward.

Source: Hisday-The Sunday Newspaper.

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