Economy

Debt servicing greatest risk to Nigeria- AfDB

Access Bank

The African Development Bank (AfDB) has cautioned Nigeria its current debt servicing obligations pose the greatest risk to the country.

AfDB President, Dr. Akinwunmi Adesina, gave the caution at the First Annual National Tax Dialogue in Abuja organized by the Federal Inland Revenue Service (FIRS).

According to Akinwunmi Adesina, “debt service payments pose the greatest risk to Nigeria”.

To mitigate this risk, Adesina stressed that Nigeria’s economy shrank “by 3 percent in 2020 on account of falling oil prices and the effects of the lockdowns on economic activities, with shrinkage in oil revenues, taxes must form a significant percentage of government revenue.”

To get the best from taxation, he noted that “digitalization of tax collection and tax administration is critical to ensure greater transparency of the tax system, widening of the tax base, while mitigating compliance risks and encouraging voluntary tax compliance.”

Ekiti Governor Dr. Kayode Fayemi called for the interrogation of “how Nigeria can further deepen the use of technology to improve tax compliance nationally and across sub-nationals.

“A significant proportion of our population will soon come into the workforce which is a golden opportunity to introduce first-time taxpayers to their civic responsibility, by adopting technology.”

Executive Secretary, African Tax Administration Forum (ATAF), Mr. Logan Wort, harped on the place of technology in generating revenue for the country in a post-COVID economy.

Wort, who joined the Dialogue virtually from South Africa, stated that “Domestic Resource Mobilisation (DRM) is expected to contribute at least 75 percent to 90 percent on average per country” in the post-Covid era, adding that Nigeria and other African countries should note that “improved tax revenue will have to take prime position” in the scheme of things.

 

The Nation

 

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