Nigeria Is facing an existential threat, the World Bank has warned. The international financial body said the country has revenue problem, and its failure will have a significant impact on Africa’s economy.
The World Bank’s Senior Public Sector Specialist, Domestic Resource Mobilisation, Rajul Awasthi, made this known during the virtual pre-summit organized by the Nigerian Economic Summit Group on Wednesday.
While giving his speech during the conference, themed ‘Critical Tax Reforms for Shared Prosperity’, Awasthi said Nigeria’s economy is at the brink of collapse due to oil revenue dropping despite price of the commodity rising.
He stated the country’s non-oil revenue is one of the lowest in the world between 2015 and 2019, and couple with fuel subsidy gulping a substantial amount from the government’s coffers, Nigeria’s spending power is low.
Awasthi suggested that the government ensure tax compliance to exit the current economic challenges that has made Nigeria the lowest among 115 countries in terms of revenue to Gross Domestic Product ratio.
“Nigeria has the largest economy in Africa and the largest country in Africa by population, so it is critical to Africa’s progress. There is no doubt about that. But the government of Nigeria, from the public finance perspective, is really facing an existential threat. Let’s not downplay the situation. That is the actual reality. he said
“Nigeria is 115th out of 115 countries in terms of the average revenue to Gross Domestic Product ratio. Despite the oil prices rising the way they have been, net oil and gas revenues have been coming down because of the tremendous impact of the subsidy.
“So, what is going to happen in 2022? The federation’s revenues are going to be significantly lower. They are already very low, and Nigeria is already the lowest in the world out of 115 large countries and this year, it’s really going to be lower than what it was in 2020 because of the debilitating impact of fuel subsidy.’
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