THE global economic meltdown is giving the Federal Government a lot of concern as it seeks new financial sources to survive.
President Umaru Yar’Adua, addressing an international tax conference in Abuja on Monday, disclosed that the crisis had resulted in more than 50 per cent decrease in commodity prices in the international market.
Saying that the global credit crunch was threatening the existence of international banks worldwide, the President stated that countries that depended on oil to survive were not finding it easy again.
He said that last month, oil was selling at $114 per barrel, but that today the commodity was available to buyers at about $64 per barrel.
“This is a clear demonstration of the volatility of the product and a danger signal to producers like us that depend heavily on the commodity to finance their budgets,” he said.
The President, who spoke through the Minister of Finance, Dr. Shamsudeen Usman, said it was imperative that the country looked for other ways of survival apart from oil.
He said for Nigeria to carry out basic functions of government, pursue and implement programmes like Vision 2020 and the seven-point agenda, a stable, predictable and sustainable source of revenue was required.
President Yar’Adua said one of the ways to achieve this was to conform with international best practices and make taxation the primary source of revenue for the government.
In pursuance of this, he said the government had commenced a series of tax reforms which included the development of a National Tax Policy which all stakeholders must subscribe to.
Noting that the problem was not that of the Federal Government alone, the President said the two other tiers of government must also be less dependent on oil as the principal source of revenue.
“States and LGAs should henceforth depend less on the monthly allocations and intensify their IGR (internally generated revenue) drives,” he said.