The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed has identified data as one of the vital tools which the federal government is deploying to boost revenue and improve economic growth.
According to her, data does not only play a key role in boosting revenue growth but also blocking leakages.
Ahmed stated this in her keynote address at a virtual conference tagged “Leveraging Data to Drive Inclusive Policy, Revenue Generation and Improved Governance”
She said that so far, data has aided government to facilitate result-oriented decision-making in the face of uncertainty, provides a basis for comparing the consequences of alternative policy choices and allows us to monitor and evaluate our performance relative to our planned targets.
Buttressing the relevance of data, she said: “Under the Strategic Revenue Growth Initiative (SRGI), we have identified various revenue initiatives that could potentially generate 13-18 trillion naira across both oil and non-oil sources, and ensuring that we are able to achieve a 15% revenue to GDP target by 2023. Importantly, we recognized that the support of States would be necessary to achieve the 15% target. In fact, the States would need to cumulatively generate about N3.4 trillion.
“Apart from behaviourial changes at the macro level, a data-driven approach also drives changes at the micro level, within our institutions. This can be in the form of plugging revenue leakages, or by identifying new sources of revenue. Let us consider these two points in turn.
“Accurate and reliable data is also essential in plugging revenue leakages. Data is equally relevant for identifying new sources of revenue. It is not enough to simply plug leakages; new sources of revenue are a necessary complimentary strategy.
“Specific actions include identifying sectors of the economy that can benefit from fiscal and tax reforms, while expanding the base and/or rate for such taxes. Ultimately, the goal is to ensure that such policy decisions are driven, not by ideology, but by data,” she said.
Citing an instance using Q1 2020 data, Ahemd disclosed that the analysis found that activities which constitute a large chunk of nominal GDP contribute relatively less to VAT collection.
“For example, Professional Services accounted for 22% of total VAT collection in Q1 2020, this activity only accounts for 3% of nominal GDP. On the other hand, Manufacturing accounted for 13% of nominal GDP in Q1 2020 but only 1% of total VAT receipts. Trade appears to be one activity that contributes as much to economic output as its share of VAT receipts.
“This may also explain why it is a significant predictor of the direction of the economy. Moreover, because it employs a sizeable proportion of the labour force and involves highly informal economic activity across the country, it can also give a sense of how the generality of the populace are feeling or faring.
“This suggests that there may be some room to consider how to design appropriate tax policies sufficient enough to generate revenue from growth in that sector without constraining it.
“This may be through greater formalization of the sector, providing incentives for operators to enter the tax net. For this reason, the forthcoming National Census of Businesses to be conducted by NBS will provide policy-relevant data to support businesses in the country.
“This will be very useful for the design of appropriate sector initiatives. I believe these examples clearly underscore the need for a robust data production framework to support the policymaking process,” the minister further explained.
Outlining some of the initiatives introduced by the government to support broader data production ecosystem, she said a recent initiative is the Open Treasury Portal which provides data related to budget implementation and government financial transactions (above a certain threshold) across all MDAs.
According to her “Through this initiative, the Administration not only demonstrates its commitment to transparency, openness and good governance, it also indicates another means through which data availability could be directed towards influencing behaviours. With the associated transparency brought by the program, it is expected to be a significant mechanism for reducing revenue leakages as well as improving spending efficiencies,”
She pointed out that the country has made progress with reliable data provided by the National Bureau of Statistics despite the obvious challenges of operating and producing data in the country, while calling on stakeholders in the industry to leverage the opportunities provided by technology to strengthen collaborative partnerships between institutions for continued national growth.
The Webina was hosted by the National Bureau of Statistics(NBS) in partnership with Softcom Limited, an indigenous and innovative technology company.
Other speakers were the Statistician General of the Federation and CEO of National Bureau of Statistics, Dr Yemi Kale; Special Adviser to the President on Finance and Economy & former Central Bank of Nigeria Deputy Governor, Dr Sarah Alade; Country Director at the World Bank, Shubham Chaudhuri.
Director General at the Budget Office of the Federation, Ben Akabueze; President of the Nigerian Statistical Association, Prof Sidney Onyeagu; and Dr Jania Okwechime, Associate Director in Risk Advisory & The West Africa Data Analytics Leader, Deloitte, we’re among the panelists.