REALLY?: 'Nigeria is not an Oil economy' - Kemi Adeosun

Kemi Adeosun, the Minister of Finance recently set the records straight as regards Nigeria’s status as an oil producing economy. 

In an article titled: ‘All Change, Nigeria Is Not An Oil Economy”, Adeosun said the country does not fit into such description and it would be wrong to categorise it as an oil economy along with countries like Saudi Arabia, Kuwait and Qatar, with very high daily oil productions and low population.  

According to her, such economies can afford to have low or in some cases no domestic revenue mobilisation in the form of taxes.  With just two million barrels of oil per day and over 180 million people, the minister estimated that 90 Nigerians share a barrel of oil compared to three Saudis, 1.44 Kuwaitis and 1.69 Qataris.  “Saudi Arabia with 10 million barrels of oil per day and 30 million people, Kuwait with 2.7 million barrels of oil per day and 4 million people and Qatar with 1.5 million barrels of oil per day and 2.5 million people are typical of such. These economies pursued an economic model that was built around a large government dependent almost entirely on oil revenue for funding,” she said.  

The minister, however, assured Nigerians that the Federal Government was determined to correct the identity crisis by increasing tax revenue.  On tax defaulters, she decried the rate at which companies evade tax and informed that government has identified over 800,000 defaulters, including some of its contractors.  Although she did not provide the identities of the offending companies, she said government was carrying out an audit of the defaulting companies.  

She also said a situation where the entire country has only 14 million active taxpayers from an economically active base of 70 million was no longer acceptable.  “A cursory look at the effective tax rates paid by the huge multinational and local operators, as well as the data on illicit financial flows, indicates a pattern of systematic tax evasion at all levels.  “Recent statistics released by the Federal Ministry of Finance showed that Nigeria has just 14 million active taxpayers from an economically active base of 70 million. Over 95% of these are salary earners in the formal sector, just 241 persons paid personal income taxes of N20m (US$65,573.77) in 2016,” Adeosun added.