A Sector in Need of Growth

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Dikko, DG, NCS
Dikko, DG, NCS

The poor performance of Nigeria’s industrial sector has translated into shortfalls of excise revenue due for the country

|  By Pita Ochai  |  Jan. 28, 2013 @ 01:00 GMT

THE Nigerian industrial sector did not fare well in the year 2012. Statistics of excise revenue collected in the year by the Nigeria Customs Service, NCS, show a decline against that of 2011,  an indication that production of goods might have declined in the country.

According to the NCS, the low capacity utilisation of local industries in the country topped the list of factors that have stifled excise revenue collection. “Some of the factories are operating at low capacity, others are temporarily shut down due to lack of patronage of their products, coupled with lack of raw materials and financial crises,” the NCS stated.

Nigeria Customs Service
Nigeria Customs Service

Between January and July 2012, the NCS collected a total of N23, 813,437,558.31 as excise revenue, a 2.17 percent shortfall in revenue. Within the same period in 2011, the Service generated N24, 342,293,393.3. In the beginning of 2012, the NCS had hoped for a hugged generation of excise revenue. In January, it collected N4, 106,816,317.43 as excise revenue; a 13.86 per cent increase on the N3, 606,758,981.84 posted in January 2011. But in February 2012, the excise revenue nose-dived by 5.99 percent. A total of N3, 318,075,313.34 was collected that month, compared to the N3, 516,872,296.72 in February 2011.

The NCS again recorded a favourable excise revenue collection in March 2012. A total of N3, 585,860.695.43 was collected which was 13.41 percent above the N3, 162,020,765.53, the Customs collected in March 2011. April 2012 was also a favourable month for the NCS, as it collected N3, 596,727,389.29 as excise revenue. This translated into a 24.23 percent increase on the N2, 895,307,006.48 collected in April 2011.

The NCS suffered the worse loss of 35.24 percent in the month of May when a total of N2, 460,282,170.18 was collected as against N3, 799,349,208.28 in the same period of 2011. The N4, 027,021,759.35 collected in June 2012, was a 5.81 percent improvement on the N3, 805,872,896.23 posted in June 2011. However, a dip of 23.55 percent was recorded with the N2, 718,653,913.29 garnered as excise revenue by the Customs, compared to the N3, 556,112,238.56 in July 2011.

The performance of excise revenue is an indication of the performance of the industrial sector of the economy. Excise revenue and industrial performance both have positive correlation. According to Okpe Haruna, a tax consultant, the excise revenue of a country is a product of the industrial growth of the country. “That is the reason every government is encouraged to provide infrastructures and other enabling environment for the growth of the industrial sector. When you invest in infrastructures and create the enabling environment for growth, industries spring up, and its multiplier effects would be the growth in government revenue which could be ploughed into further development purposes,” he said.

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