The public sector contributes little in terms of revenue but can contribute a lot in terms of policy enablers – ease of doing business, legal innovations etc. what follows are legal/policy innovations on how government can generate revenue.
Last year Nigeria made ₦970.3 Billion from oil, ₦1.6 Trillion from non-oil taxes, and ₦2.8 Trillion from a cumulative of other sources. In total the country brought in ₦5.5 Trillion in revenue. Out of that ₦5.5 Trillion revenue, ₦4.2 Trillion was spent on servicing debts from January to November. What was left after paying debts was ₦1.3 Trillion. If you recall, the 2021 national budget was N13.57 trillion. This meant we had barely N1.3 trillion to run the country and needed an extra ₦12.
If Nigeria was a man who makes ₦100k a month, he borrows ₦5 million every month to pay for the light bill and running of the house. You see the picture now? Scary, isn’t it? The Excess Crude oil account is almost empty. So not only does this man borrow like a crazy person, he has no savings for emergencies . The rule is we should never borrow more than 40% of our GDP. We are at 36.9%; 3.2% more and all the alarm bell goes off.