Growing revenue leakages and dilapidating health budget

Abubakar Jimoh

The Civil Society Legislation Advocacy Centre (CISLAC)’s attention has been drawn to the persistent nation’s revenue leakages and sharp cut in the 2016 budgetary allocation to health sector, despite the rising challenges confronting child and family health in the country.

A recent report by Tax Justice and Governance Network (TJ&GN) reveals that revenue leakage arising from corporate tax incentives granted multinational companies after the end of initial five-year tax break has cost Nigeria billions of dollars, disclosing Nigeria lost over US$20 billion to tax fraud evolving from incentives between 2010 and 2014.

The corporate tax incentives in the analysis of Tax Justice Network Africa, include reduction in corporate income tax, rates and tax ‘holidays’ offered by governments to investors for specified periods, to attract new foreign direct investment by companies operating in special economic zones.

In a recent published comparative report by ActionAid on tax incentives granted over the years by four African countries—Nigeria, Ghana, Côte d’Ivoire and Senegal, Nigeria recorded the biggest loss of about $2.9 billion (N577 billion) to tax waivers annually. The loss according to the report is more than the Federal Government’s annual budget to the health sector.

The report further stated that the tax holiday extension meant the loss of about $2 billion in revenue, and the rolled over allowances where the same tax was effectively foregone twice, a further $1.3 billion, adding that tax foregone in the first five years was not counted, as this was the normal tax break.

It would be recalled that in 2014, Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) had raised alarm over the incessant loss of the nation’s revenue to tax waivers. It was on this observation that Nigeria Customs Service (NCS) reported that between 2011 and 2013, import waivers granted various individuals and groups by the Ministry of Finance cost the Federal Government N1.4 trillion.

CISLAC finds it worrisome that despite persistent decrease in nation’s revenue from the oil and gas sector, the government has remained adamant to innovatively embrace alternative sources of funding by blocking identified massive revenue leakages and redirect revenue therefrom to support important sector like health.

Meanwhile, in 2013, a study conducted by CISLAC gathered that in Nigeria, one in 13 women dies during pregnancy or childbirth, and 12% of children die before reaching the age of five. The study observed that every 10 minutes one woman dies from conditions associated with childbirth; and only 39% births take place with assistance of medically trained personnel, coupled with the scarcity of skilled attendants, absence of personnel, among other factors impeding the effectiveness of health services in the country. The identified factors are largely attributed to poor budgetary allocation to health sector.

Similarly, the Association for the Advancement of Family Planning (AAFP) has confirmed that Child Spacing has direct impacts on the health of the family and grossly the economy of a nation as a whole with tendency to mitigate maternal and child deaths in the country. Yet, budgetary allocation to Child Spacing in the contexts of Nigeria Family Planning Blueprint and the Costed Implementation Plans is an endemic challenge.

Also, the recent announcement by the World Health Organisation (WHO) declaring Nigeria free from the longtime dreadful polio endemic may soon resurge in the absence of provision of adequate finances by the government to sustain intervention on Routine Immunization in the country. Consequently, as the Nation Assembly deliberates on 2016 Appropriation Bill, there are serious public outcries by various stakeholders advocating for effective child and family health in Nigeria such as Community Health Research Initiative (CHR) agitating for adequate finances for immunization to ensure sustainability and avert future resurgence of polio virus.

With over 11 million stunted children, Nigeria is without doubt confronted with the daunting challenge of malnutrition and ranks second with highest number of stunted children globally. Civil Society Scaling-up Nutrition (CS-SUNN) has reported that malnutrition contributes to nearly half of all child deaths globally, amounting to more than 3 million children each year. The country continues to face malnutrition challenges as a result of inadequate budgetary allocation to nutrition line items.

Pneumonia and diarrheal diseases remain the major killers of children, with no fewer than 2.1 million Under-5 years and neonatal deaths occurring in Nigeria in 2014. As stated by the Pharmaceutical Society of Nigeria (PSN). The country signed into 15 essential commodities in the United Nations Commission on Life-Saving Commodities (UNCoLSC) recommendations, among which three are itemized for the survival of the Under-5 death. The recommended commodities for the survival of the Under-5 include: Amoxicillin antibiotic in dispersible tablet form (amoxicillin DT) as first line treatment in the management of childhood killer pneumonia disease; and Zinc and Oral Rehydration Salt Solution (Zn/ORS) both for the treatment of childhood diarrheal disease. However, efforts to tackling childhood killer diseases have been impaired by lack of specific budget line for the quantification and procurement of the recommended commodities at all levels.