The Debt Management Office has called on the Federal Government to boost its revenue generation strategies by broadening the tax base, increasing tax revenue collection and privatising some viable enterprises.
The debt office in its 2017 Debt Sustainability Analysis, over the weekend, said the essence of the new revenue strategy was in order to enable government raise fresh funds to supplement its revenue for capital investments, and encourage government to privatise some of its viable enterprises and have them listed on The Nigerian Stock Exchange.
“Hence, the need for government to sustain the on-going efforts aimed at reforming, restructuring and repositioning some of these enterprises for privatisation or commercialization; including Nigerian Postal Services, the Nigerian Commodities Exchange, the Lagos International Trade Fair Complex, the national stadia, and the Nigerian Security and Minting Company.”
The DMO also said for the country to stay within its 25 per cent debt to Gross Domestic Product threshold, the three tiers of government should not borrow more than $6.25 billion in the 2018 fiscal year.
The DMO stated, “The fiscal sustainability analysis for the federation (federal, states and the FCT), showed that the ratio of total public debt-to-gross domestic product, GDP, remained below its threshold throughout the projection period.
The ratio of total public debt-to-GDP for 2017 was projected at 19.80 per cent. “Both the external and fiscal sustainability analyses showed that all the revenue indicators (the ratios of debt-to-revenue and debt service-to-revenue) deteriorated under varying shocks, suggesting that any prolonged shocks on the revenue would lead to debt distress in the medium to long-term, except other sources of revenue are speedily developed to enhance the revenue generation performance of the country.”
The DMO recommended that in order for the country to remain in the propose country-specific threshold of 25 per cent borrowing limit, it would have to borrow (domestic and external) the maximum of $6.25 billion or N1, 906.37 billion for this year.
“In order to estimate the borrowing limit for 2018, it requires the determination of the difference between the proposed country-specific threshold of 25 per cent and the end period.
“Therefore, the maximum amount that could be borrowed (domestic and external) for the fiscal year-2018 by the government without violating the proposed country-specific threshold of 25 per cent up to 2020, would be $6.25 billion or N1,906 billion (at N305 per dollar),” the DMO ruled.
