Nigerian Austerity Measures: ‘Jonathan Should Lead by Example’
Tuesday, 18 November 2014 05:01
Written by Sunday Michael Ogwu
Nigeria Daily Trust
Economic experts have chided the federal government over its austerity measures announcement, saying top government functionaries should rather cut down their expenses.
The federal government had on Sunday announced a number of measures to insulate the economy from the shocks of the continuous crude oil price fall in the international market.
Finance Minister Ngozi Okonjo-Iweala had said among the measures been considered will be to surcharge the rich to raise revenue on luxury items like jets, yacht, champagne etc.
The idea, she said, is that those Nigerians who are comfortable should contribute more to making the government coffers more robust such that they share a bit more of the pain.
“This adjustment is not just about tightening the belt; it is about trying to increase non-oil revenue. We are looking at correcting leakages, inadequacies and inefficiencies in the non-oil sector and we are driving to improve collection of internally generated revenues,” she added.
Though the Coordinating Minister of the Economy assured that the government will continue to meet its salary obligation at any rate as the measure being put in place is to protect those at the ‘bottom of the pyramid’, noting that many Nigerians believed poor people will bear the largest brunt of the measure.
Yesterday, experts in separate interviews with Daily Trust said top government officials should have led by example by cutting down on their luxuries that are being paid for from public treasury before taking any economic belt tightening that could affect poor Nigerians.
National President of the National Association of Nigerian Traders (NANTS), Ken Ukoaha, in his reaction to the measures said: “This is not good news for anybody and neither calls for cheers. This step is the result of our overly dependence on oil revenue. This is an indictment on all those who have ruled this country who saw no problem in coming to share oil money. We stopped thinking, killed our local industries and agriculture and now we have to pay for it.”
Dr Garba Bala Magaji of the Ahmadu Bello University, Zaria, however has other ideas for consideration by government.
He said: “Let the president lead by example. For instance, let him reduce the number of his jets, curtail expenditure, remove the corruption in the oil sector. After all revenue is income minus expenditure. If corruption continues as it is, the income reported will be low. We must increase the transparency in reporting the activities of the oil sector and we will have more income that we currently have.”
Other Nigerians who spoke to Daily Trust joined Dr Magaji in calling on government to plug the loopholes in her internally generated revenue.
Investigation by Daily Trust reveals that only 21 revenue generation agencies of government have remitted their operating surplus to the Consolidated Revenue Fund since the inception of the Fiscal Responsibility Act (FRA) in 2007.
According to the FRA, every government corporation is required to establish a general reserve fund where 20 percent of its operating surplus is allocated annually while the balance of 80 percent is to be paid into the federal government’s Consolidated Revenue Fund (CRF).
An expert, Dr Victor Muruako, was quoted recently to have said: “In a deliberate attempt to avoid the provision of FRA, government agencies habitually under-project their revenues and over-estimate their expenditures thereby ensuring that their remittances to the CRF were minimal, if any at all.”
A breakdown of the records available to Daily Trust further shows that only five of the government’s establishments that have complied with the act are consistent with their remittances since 2007. They are the Nigerian Shipping Council (NSC), the Nigerian Deposit Insurance Corporation (NDIC), Central Bank of Nigeria (CBN), NAC and the Nigerian Immigration Service (NIS).
Dr Magaji also queried why government officials at “directorial level’ go about flying first and business classes while the government chants about cutting cost.”
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| Fed. Rep. of Nigeria Minister of Finance Dr. Ngozi Okonjo-Iweala. |
Written by Sunday Michael Ogwu
Nigeria Daily Trust
Economic experts have chided the federal government over its austerity measures announcement, saying top government functionaries should rather cut down their expenses.
The federal government had on Sunday announced a number of measures to insulate the economy from the shocks of the continuous crude oil price fall in the international market.
Finance Minister Ngozi Okonjo-Iweala had said among the measures been considered will be to surcharge the rich to raise revenue on luxury items like jets, yacht, champagne etc.
The idea, she said, is that those Nigerians who are comfortable should contribute more to making the government coffers more robust such that they share a bit more of the pain.
“This adjustment is not just about tightening the belt; it is about trying to increase non-oil revenue. We are looking at correcting leakages, inadequacies and inefficiencies in the non-oil sector and we are driving to improve collection of internally generated revenues,” she added.
Though the Coordinating Minister of the Economy assured that the government will continue to meet its salary obligation at any rate as the measure being put in place is to protect those at the ‘bottom of the pyramid’, noting that many Nigerians believed poor people will bear the largest brunt of the measure.
Yesterday, experts in separate interviews with Daily Trust said top government officials should have led by example by cutting down on their luxuries that are being paid for from public treasury before taking any economic belt tightening that could affect poor Nigerians.
National President of the National Association of Nigerian Traders (NANTS), Ken Ukoaha, in his reaction to the measures said: “This is not good news for anybody and neither calls for cheers. This step is the result of our overly dependence on oil revenue. This is an indictment on all those who have ruled this country who saw no problem in coming to share oil money. We stopped thinking, killed our local industries and agriculture and now we have to pay for it.”
Dr Garba Bala Magaji of the Ahmadu Bello University, Zaria, however has other ideas for consideration by government.
He said: “Let the president lead by example. For instance, let him reduce the number of his jets, curtail expenditure, remove the corruption in the oil sector. After all revenue is income minus expenditure. If corruption continues as it is, the income reported will be low. We must increase the transparency in reporting the activities of the oil sector and we will have more income that we currently have.”
Other Nigerians who spoke to Daily Trust joined Dr Magaji in calling on government to plug the loopholes in her internally generated revenue.
Investigation by Daily Trust reveals that only 21 revenue generation agencies of government have remitted their operating surplus to the Consolidated Revenue Fund since the inception of the Fiscal Responsibility Act (FRA) in 2007.
According to the FRA, every government corporation is required to establish a general reserve fund where 20 percent of its operating surplus is allocated annually while the balance of 80 percent is to be paid into the federal government’s Consolidated Revenue Fund (CRF).
An expert, Dr Victor Muruako, was quoted recently to have said: “In a deliberate attempt to avoid the provision of FRA, government agencies habitually under-project their revenues and over-estimate their expenditures thereby ensuring that their remittances to the CRF were minimal, if any at all.”
A breakdown of the records available to Daily Trust further shows that only five of the government’s establishments that have complied with the act are consistent with their remittances since 2007. They are the Nigerian Shipping Council (NSC), the Nigerian Deposit Insurance Corporation (NDIC), Central Bank of Nigeria (CBN), NAC and the Nigerian Immigration Service (NIS).
Dr Magaji also queried why government officials at “directorial level’ go about flying first and business classes while the government chants about cutting cost.”
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