“There’s now an excise duty of N10/per liter imposed on all non-alcoholic and sweetened beverages; and this is to discourage excessive consumption of sugar in beverages which contributes to a number of health conditions including diabetes and obesity.” Nigeria’s minister of finance, Zainab Ahmed.
Samuel Nwite explains how Nigeria has ramped up taxation in this piece. The nation has no option with debt servicing picking a big chunk of the nation’s revenue. My prediction remains: by 2027, most national universities would be privatized as the government looks for ways to cut expenses.
The current model of everywhere tax will not do much since there are few things to tax. The key thing would be cutting expenses; you will see surprises.
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The Central Bank of Nigeria (CBN) has stated that heavy debt servicing is taking a toll on lean fiscal resources.
This was disclosed by a member of the CBN board, Prof. Mike Idiahi Obadan in his personal statement at the last MPC meeting.
The debt serving position for Nigeria could hinder the availability of funds to finance critical government programmes and projects.
[…]
“The Federal Government has struggled against the tide of two debilitating recessions in five years, occasioned largely by externally-induced shocks including the coronavirus-induced health and economic shocks. With little or no fiscal buffers, it has had to borrow heavily, domestically and externally, to mitigate the negative impacts of the shocks,” he said.
He stated that the skyrocketing debt service to revenue ratio is putting pressure on Nigerian’s fiscal resources. “With the rising debt service-to-revenue ratio, which is currently put at over 90%, heavy debt servicing is taking a toll on lean fiscal resources and could hinder the availability of funds to finance critical government programmes and projects,” Obadan stated.
Sugar Tax: Nigeria Introduces N10/Liter Tax on Non-alcoholic Beverages
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“The current model of everywhere tax will not do much since there are few things to tax. The key thing would be cutting expenses; you will see surprises”. Sir It will be nice to expanciate on this statement in another article. Please throw more light on how government can cut recurrent expenditure. I know that there is a lot of “procurement and contract inflation” going on in the civil service and also that our current system of government is very expensive. Nigeria spends most of its money on sustaining an expensive structure; 774 LGA, 36 State and state house of assembly, 104 Senators and 360 House of representatives all having their aids and appointees that have to be paid salaries. This expensive structure increases our recurrent expenditure, leaving little for capital projects. How can Nigeria cut cost without restructuring itself to either 3 regions, 7 regions or even 12 states.
You have actually provided the solutions. I do not believe that Nigeria needs 36 states. I do think Nigeria at this phase needs to be 6 “states”. If we do that, the wastes on other “30 states” can be put into capital projects. Also, the structure of the current national assembly was designed for a matured economy. We do not need that. Senate can do whatever House is doing. There are many options. You can have one university per region with other federal ones as specialized campuses. Say in SE, you have UNN and FUTO can be the engineering school; Fed Umudike the Agricultural School, etc. If you do that, you cut so many admin costs and put good money where things matter. But here, check how many cars we have for university admins across Nigeria, you will see while we need to restructure things.