News
FG Unveils Measures To Tackle Oil Price Drop
The Federal Government has announced a multi-pronged strategic response to mitigate the adverse effects of the drastic fall in global oil prices. The measures are also meant to protect growth, reassure investors and keep the economy on a stable course through the crisis.
Addressing a Special Media Briefing in Abuja yesterday, the Coordinating Minister for the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala declared that the Federal Ministry of Finance has been keeping a close eye on movements in global oil prices because of the critical importance of oil as the country’s most important source of revenue.
The response is a mix of measures designed to boost non-oil revenues, plug loopholes and waste and cut unnecessary expenditures in order to cope with the situation.
As part of the response, the Medium Term Expenditure Framework (MTEF) and the 2015 Budget proposal to the National Assembly have been revised. As a result, the federal government will be proposing a benchmark of $73 dollars per barrel to the National Assembly compared to the earlier proposed benchmark of $78.
The Minister explained that even though the government has been working hard on several scenarios and contingency plans in readiness for any eventuality, it was important to proceed in a measured manner based on a complete understanding of the challenges.
According to her, “given the nature of the oil market, we needed to see the extent and trend of the oil price in order to take the right measures. Panic is not a strategy. It’s important that our strategies are based on facts and a clear understanding of both the strengths of the economy and the challenges posed by the drop in oil prices which is currently at $79 for our premium Bonny Light Crude.”
“The drop in oil prices is a serious challenge which we must confront as a country. We must be prepared to make sacrifices where necessary. But we should also not forget that we retain some important advantages such as a broad economic base driven by the private sector and anchored on sound policies. Our strategy is to continue to strengthen the sectors that drive growth such as agriculture and housing while reducing waste with a renewed focus on prudence.. she added.”
The Minister recalled that in the last three years, the Executive in its discussions on the budget with the National Assembly has consistently advocated prudence and a low budget benchmark to encourage more savings.
She stressed that even though the drop in oil prices is a serious challenge, it is also an opportunity for the country to focus on greater diversification and refocus efforts towards the non-oil sectors in preparation for a future with less oil revenue.
She stated that the decline in oil prices has given additional impetus to the federal government’s focus on increasing non-oil revenues. In this regard, the collection target for the Federal Inland Revenue Service (FIRS), which has been working with Mckinsey to increase receipts will be revised upwards for next year.
The country has had good success in reaching the initial target set this year of N75 billion; so far N65 billion of this has been collected. For 2015, the revised target is N160 billion above the 2014 base. As part of the efforts to reduce expenditure, international travel within the public service will be severely curtailed. From next year, only critical foreign travels will be allowed with the permission of Head of Service of the Federation (HoS).
According to the minister, “any other foreign travel will have to be funded by those inviting civil or public servants and all expenses paid by the inviting body. Same goes for training, local training will be encouraged but expenses for foreign training will be borne by inviting foreign host with permission sought from HoS. Evidence of sponsorship detailing all expenses paid for by inviting body must be tendered before HoS will grant approval.”
She disclosed that there will be a drop in some capital spending but critical infrastructure projects will not be affected because they are key to economic growth and development as well as job creation. Investment in infrastructure, job creation and security will not change but there will be prioritized investment in those with significant economic impact like Lagos-Ibadan Expressway, Second Niger Bridge and rail projects.
The implementation of the new mortgage system including the current processing of over 66,000 applicants for mortgages will go on as planned so that the country reaps the strong benefits that will come from unleashing the housing revolution which is attracting serious interest from local and international investors.
Also unaffected are public sector wages as well as key initiatives in education, health and other areas critical to the country’s human development.
The minister said she was “not sure of what direction to take with taxes but that a key initiative on the revenue side is a surcharge on luxury items details of which are being worked out. Government’s efforts from now she said will be to drive to increase Internally Generated Revenue (IGR) of entities and ensure that they remit these IGRs on time to government coffers. “This economy has to stop talking about oil”
She noted that there will be surcharges on luxury items like champaign, private jets, yachts, so that those well-to-do individuals can contribute more to government treasury.
Also Ministries Departments and Agencies (MDAs) that make surpluses will now be made to remit such surpluses immediately to government accounts while some taxes will be adjusted to enhance revenue.
On calls from some quarters that the federal government should respond to the decline in revenues arising from the drop in oil prices by printing more Naira to fund projects, the Coordinating Minister said that such poorly thought out populist recommendations would be disastrous for the country if implemented.
She said such prescriptions ignore the facts of history as well as the elementary principles of economics. “Printing money without adequate revenue support will lead to serious consequences for the country. It will spur spiral inflation as the experiences of Germany in the early part of the last century and more recently, Argentina and Zimbabwe demonstrate. This prescription will victimize the poor and middle class that it is supposedly protecting.”
Should oil price fall to $70 or lower, government Okonjo-Iweala said has additional measures to ensure softer landing for the economy. The economy she said “continues to exhibit strength but government will not compensate by borrowing or printing currency but will borrow at very low interest rate and no large domestic borrowing.”
She explained that the best way to protect the interest of the ordinary people is to control inflation as much as possible, expand the economic base, strengthen the sectors that drive growth, boost critical infrastructure and create more jobs.
The External Reserve she said is now at $37 billion is still reasonably good, while the Excess Crude Account (ECA) is still good but government will spend part of it on some transparent transactions. “We might tap into half of the ECA between now and the new year. We have arrears on subsidy pending this will be addressed” she said.
The Nigerian Association of Resident Doctors (NARD), has decried the continued exclusion of its members from payment of specialist allowance despite performing specialist functions in various health institutions across the country.
It also condemned the persistent casualisation and poor remuneration of members by chief executives of tertiary hospitals.
The President of the association in Akwa Ibom State, Dr Osundara Tope, raised the concerns while addressing a press conference where he read the communique issued at the end of the May ordinary meeting and scientific conference with the theme: “The Medical Profession: Policies, Politics, and Future Prospects,” held in Uyo at the weekend.
The communique was signed by the association’s President, Dr Osundara Tope, Secretary-General, Dr. Odunbaku Kazeem Oluwasola, and Public and Social Secretary, Dr. Amobi Omoha, respectively.
“The OGM observed with disappointment the continued exclusion of resident doctors from the payment of specialist allowances, despite their active role in delivering specialist care across various health institutions.
“The OGM strongly condemns the continued and persistent casualisation and the consequent poor remuneration of doctors by the chief executives of tertiary hospitals .The meeting also expressed disappointment over the non-payment of arrears from the upward review of the CONMESS salary structure and other outstanding salary arrears,” the communique read.
The association condemned federal government’s failure to pay the 2024 Accouterments Allowance arrears and persistent shortchanging of its members for the past 16 years due to absence of consequential adjustments to the CONMESS structure, which it noted was a breach of the 2009 Collective Bargaining Agreement.
He further expressed disappointment over lack of response to multiple correspondences on the issue, emphasising that such contradicts the National Policy on Health Workforce, which advocates improved incentives to retaining healthcare workers.
According to Tope, “The OGM notes with concern the persistent short-changing of members for 16 years, due to the absence of consequential adjustments to the CONMESS structure, in breach of the 2009 Collective Bargaining Agreement.
“This contradicts the National Policy on Health Workforce, which advocates improved incentives to retaining healthcare workers.
“The OGM is dismayed at the lack of response to multiple correspondences sent over the past six months regarding the consequential adjustments.The OGM condemns the Federal Government’s failure to pay the 2024 Accoutrement Allowance arrears.”
The meeting further expressed displeasure over the delay in addressing welfare issues in Obafemi Awolowo University Teaching Hospital including the non-payment of outstanding March 2024 salaries, the 7–14 months of arrears still owed to Residents and Medical Officers of the association
It therefore demanded immediate payment of the arrears of the 25/35% upwardly revised CONMESS, and other salary arrears and full implementation of consequential adjustments to the 2019 and 2024 minimum wage on basic salaries and allowances, along with accrued arrears.
A maritime security outfit, Active Marine Surveillance and Coast Guard Limited, says it is ready to deploy its men to ensure security across waterways in Rivers State and Niger Delta.
The group which said this in an interview with newsmen in Port Harcourt also pledged to collaborate with the various security agencies to ensure safety on the state waterways.
Director General of the organisation, Commandant Godwin Amare, said the organisation cannot sit down and watch pirates take control of the waterways in Rivers State and the Niger Delta region.
He said his group is planning to deploy its men to the Bonny, Bille and Degema rivers to check the activities of pirates
According to him, allowing pirates to take control of these waterways will not only affect the economy of Rivers State but the entire Niger Delta region.
He said the paramilitary organisation has the manpower to check piracy on the waterways but required the support of both the federal and state governments especially in the provision of the necessary security equipment such as speed boats.
Amare said the organisation, which protects jetties and waterways from pirates is also involved in search and rescue operations ,adding that his organisation has competent divers who can undertake rescue operations, in deep waters.
“We cannot be sitting down here while our aims and objectives is not being fulfilled. “We want to tell the federal and state governments that we want to come out and join in the fight against sea piracy to make our waterways safe
“The Nigerian Navy cannot do it alone. We want to support the government by deploying our men across waterways in Rivers State and the Niger Delta so that it would be safer for people to travel on the waterways”, he said.
He said the government can assist the organisation by providing them with security boats and other instruments
Amare also disclosed plans by the organisation to embark on a tour of jetties across the region with a view to guaranteeing their safety.
Also speaking, Deputy Commandant, Active Marine Surveillance and Coast Guard Limited, Captain Dain Elekima, said all the creeks in the region need to be combed daily to flush out pirates.
He said his group has the required manpower but needs the support of both the state and federal governments to ensure safety on the waterways.
Speaking the director Finance and Operations Active Marine Surveillance and Coast Guard Limited Captain Emberro Michael said they are ready to work with the Nigerian Navy and Marine police to check all Incidences of insecurity along the waterways.
Captain Michael stressed the need for the federal and state governments to support the group.
By: John Bibor & Claire Julius
The Nigeria-Cameroon border motor park construction site is now overgrown with weeds.
Etung Local Government Area of Cross River State embarked on the project last January 2025 when they cleared the entire expanse of land and deployed machinery to commence construction work.
The international motor park site is situated along the Ikom-Mfum border road, a few distances into Cameroon.
There are outcries and worries by motorists, traders and international travellers who were initially excited over the project, given the volumes of trade and travels between the state and Cameroon Republic.
A visit to the site at the weekend showed how the site of the facility has been overtaken by bush and reptiles.
In an interview, a farmer on Effraya Road, Etomi, in the council area, Mr Anthony Attah, expressed sadness over the seeming abandonment of the project five months after it was commenced.
“I had considered the project a laudable one, and had commended the Council chairman, Henry Anom, for the initiative, considering the economic importance of such a park to the Local Government Area, taking advantage of the Cameroon borders.
“Barely four months after the excavation of the land, the place has become a bush again.”
A business man and cocoa farmer, Everlasting Eriom, also lamented the apparent discontinuation of the project which he believed, would have eased his tasks and boost his cocoa sales.
Eriom said, “Whatever are the reasons for the abandonment, let the administration of Henry Anom note that this is about the only visible project that would etch his name in history books and has the capacity to raking up Council internal revenues.”
Reacting in a statement, the Supervisor for Finance in the Etung Local Government Area, John Ogar explained that the project has been mired in controversy and legal tussle.
“The Executive Chairman of Etung Local Government Area, Henry Anom, conceived the initiative of giving Etung a unique Motor Park Facility as a border local government. Unfortunately barely days after excavating the site to kickstart actual development, we were slammed with a court injunction, as previous administration had given out the parcel of land without proper documentation to guide the current dispensation, so we can’t fight the court.
“We only have to obey the law while we fine-tune measures to have things work out.”
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