THE Resident Representative of the International Monetary Fund (IMF) office in Nigeria, Ari Aisen, has said that Nigeria needs to efficiently raise revenues and manage its expenditure if it wishes to resolve its debt issues.
Aisen made this remark at the Proshare WebTV online event organised recently. Corroborating the Debt Management Office’s (DMO) position on the need for Nigeria to address current revenue shortfalls, Aisen said, “The DMO is just trying to do its best in terms of financing the spending needs of the government. However, it is very clear that to resolve the debt issue of Nigeria, there is a need to concentrate on revenues and expenditures.”
He further explained that Nigeria’s high expenditure on its low revenue base is contributing to the country’s rising debt.
According to him, “Nigeria’s debt position has deteriorated because the government is spending more than it’s getting in revenues.”
He advocated for fiscal discipline, highlighting that it was a major way to reduce excessive spending and ultimately address Nigeria’s current debt position.
“Fiscal discipline requires, as in any household, that you cannot permanently spend beyond what you raise in revenues simply because it becomes unsustainable. You must rely more on your revenues, to finance your expenditures,” Aisen said.
The IMF resident representative tasked Nigeria to efficiently target its spending towards enhancing social welfare and improving the standard of living. He however noted the importance of revenues for infrastructural development, improving social welfare and avoidance of issues relating to Ways and Means Advances.
“The issue of revenue is existential for Nigeria, because on one hand, you need more revenues for spending on social needs and infrastructure that is efficient, but you also need more revenues to avoid having to get financing from the central bank, which is extremely inflationary.
“Therefore, the revenue piece in all this is highly essential for Nigeria to achieve macroeconomic stability, reduce inflation and rein in on the liquidity in the market on one hand, and on the other hand, raise resources to spend properly on efficient spending that will contribute to inclusive growth, creation of employment, infrastructure, health, education and social protection. This is the challenge for Nigeria,” he stated.
Aisen advocated for good governance and efficient tax administration whereby all entities are paying taxes and seeing its impact on national development.
According to him, “the willingness of corporations and individuals to pay their taxes goes hand in hand with good governance and use of funds. One aspect of it is you cannot rely only on a few corporations paying the entire tax bill. Bringing everyone into the net to contribute to the tax effort is essential.”
