Two news reports last week showed Nigeria raking in a lot of revenue from one direction and losing much of it in another. This is the good and bad news. First, the good news: The Federal Inland Revenue Service (FIRS) disclosed Monday that it collected N5.320 trillion in revenue in 2018, the highest in the country’s history. Chairman Tunde Fowler, who disclosed this in Lagos at a retreat on “Parliamentary Support for Effective Taxation of the Digital Economy”, said its target for 2019 was N8 trillion. The 2018 collection was more than a half the size of the year’s federal budget of N8.9 trillion.
At the Federation Accounts Allocation Committee (FAAC) in December, the FIRS had said its cumulative revenue collection as at November 2018 stood at about N4.63 trillion. But speaking in Lagos, Fowler said the N5.320 trillion collection recorded for the year exceeded the previous highest ever figure of N5.07 trillion generated in 2012. He said the latest revenue increase was significant particularly at a time when crude oil price averaged about $70 per barrel. The detail of the collections shows non-oil revenue stood at about N2.467 trillion, against oil revenue collection of about N2.85 trillion.
Fowler said while revenue collection has been increasing steadily over the years, cost of collection has been dropping. He added that FIRS was automating collection of Value Added Tax (VAT) in key sectors, resulting in a 31% year-on-year collection in the banking sector between January 2017 and December 2018. Net collection so far was N25 billion. “There is also the Government Information Financial Management Information System (GIFMIS) which links FIRS to the Office of the Accountant General of the Federation OAGF for real-time exchange of information and data,” he said.
Now the bad news is that the United Nations has said Nigeria lost an estimated 2.8 billion dollars (approximately N9 trillion) in revenues in 2018, mainly due to oil-related crimes. This is contained in a new ‘Report by the Secretary-General on the activities of the United Nations Office for West Africa and the Sahel (UNOWAS)’ released Monday in New York, covering July 1, 2018 to Dec. 31, 2018. “Between January 1 and November 23, there were 82 reported incidents of maritime crime and piracy in the Gulf of Guinea,’’ it says. The report also notes that compared to the situation reflected in the previous report, there was an increase in drug trafficking throughout West Africa and the Sahel. “In Benin, the Gambia and Nigeria, more than 50 kilogrammes of cocaine were seized between July and October by joint airport interdiction task forces.”
What the UN report seems to be saying is that Nigeria makes a lot of money only to lose it to crooks, particularly those in the oil industry. This means that our vigilance architecture is defective. The source of the revenue leak is piracy on the high seas and collaborators on land. Since piracy is transnational in nature, the war to stop it must also be multilateral in form. We need to approach it in the same way and manner that the war on terror, represented by Boko Haram and its allies, is being waged. The UN report says the oil-related crimes take place in mainly the Gulf of Guinea. We need to enlist the collaboration of countries in that maritime zone, especially Cameroon and Equatorial Guinea.