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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 World Trade Organisation (WTO), has described the legacy of the President of the African Development Bank (AfDB), Dr Akinwumi Adesina, as a source of pride for Nigeria and the African continent.
The Director-General (DG) of the World Trade Organisation, Dr. Ngozi Okonjo-Iweala said this in a statement by the AfDB yesterday.
Okonjo-Iweala made the remark in a video message delivered to AfDB shareholders and delegates at the closing session of the Bank’s Annual Meetings held in Abidjan, Côte d’Ivoire.
The DG commended Adesina for what she called a decade of transformative leadership that significantly elevated the Bank’s standing and contributed meaningfully to Africa’s development agenda.
“President Akinwumi Adesina is leaving behind a strong legacy of leadership and service. Nigerians and all Africans should be proud,” the WTO chief said.
Recalling their time together in the cabinet of former President Goodluck Jonathan, Okonjo-Iweala noted Adesina’s pioneering efforts in agriculture, especially his introduction of the digital wallet system to empower women farmers.
“I challenged him to reach an additional one to two million women farmers, promising performance-based budget support. He delivered, reaching two million more.
“That’s the kind of leader Akin is. He brought uncommon passion to his work and made a difference to the lives of farmers in the country.
“His leadership has significantly raised the profile of the AfDB to a new height of recognition and respectability,” she said.
Okonjo-Iweala, who was Nigeria’s Minister of Finance in 2015, led the campaign that resulted in Adesina’s election as AfDB President.
The WTO boss praised the growth of the AfDB’s capital base under his leadership from 93 billion to 318 billion dollars, describing it as a remarkable achievement.
She also commended Adesina’s “High 5s” agenda, a strategic framework focused on transforming key sectors across the continent, saying that the initiative remains critical to the achievement of Africa’s Agenda 2063.
“With sustained commitment and strategic focus, Africa’s development goals remain achievable,” she said.
The WTO director-general urged African nations to take greater ownership of their development and turn growing international interest in the continent into concrete investment opportunities.
She also lauded the African Investment Forum, a flagship initiative launched by Adesina and eight other partners to bring infrastructure and development projects to bankable stage.
According to her, the initiative complements the WTO’s efforts to promote economic integration and development in Africa.
Okonjo-Iweala further thanked African leaders, shareholders, and the Bank staff for the support given to Adesina throughout his tenure.
She paid a special tribute to Adesina’s wife, Grace, for what she described as her “steadfast support for her husband’s demanding role” over the past 10 years.
Adesina, who assumed office in 2015, is completing his second five-year term as President of the African Development Bank.
The Chief of Army Staff (COAS), Lt-.Gen. Olufemi Oluyede has declared his support for the early voting bill introduced by the Senate for military and security personnel deployed during elections.
Oluyede expressed the support of the army for the bill at meeting with the Chairman, Senate Committee on Army, Sen. Abdulaziz Yar’Adua (APC-Katsina state) in Abuja, yesterday.
He said that the job of the army on Election Day in collaboration with sister security agencies, was to create an enabling environment for Nigerians to exercise their franchise freely.
According to him, the army has been doing very well in support of the lead agency which is the Police and they have not had time to exercise their own franchise.
“The bill is actually long overdue, it is a laudable effort by the senator and we appreciate you; you have all our support for all the bills.
“As an army, we will support you as much as possible and for the programmes you have high noted, be sure we will be well represented,” he said.
The chief, however, urged the crafters of the legislation to put measures in place to avoid impersonation and to enhance communication among security agencies and other essential workers.
He commended the senator for all the support for the army and the legislative support
Earlier, Yar’Adua said that the aim of the visit was to solicit the support of the army for three bills currently under consideration in the National Assembly.
He said that the bills generally seek to strengthen the army forces and deepen its democratic participation in the country.
“The bills are, the Electoral Act Amendment Bill, the Arm Forces Trust Fund Amendment Bill and the Arm Forces Act Repeal and Reenactment Bill.
“I am here basically to seek your support and the partnership in the passage of the bills,” he said.
The senator said that Electoral Act Amendment Bill was necessary to address the number of eligible Nigerians that are disenfranchised because of essential duties.
According to him, we have close to two million Nigerians who work on elections day from the military, INEC staff, Ad hoc staff, NYSC corps members, security agents, journalists and election observers.
Yar’Adua recalled that during the 2023 general elections, the Nigerian Army deployed 95 per cent of its personnel for election related security issues.
He said that together with the Department of State Security (DSS) the military deployed 93,495 personnel.
The lawmaker said that the police deployed 310,973 personnel, the NYSC deployed 200,000 corps members while the National Security and Civil Defense Corps (NSCDC) deployed 81,000 personnel.
He said the Federal Road Safety Commission (FRSC) deployed 21,000 personnel, the Nigerian Correctional Centre (NCC) deployed 11,336 officers, Economic and Financial Crimes Commission (EFCC) deployed 350 operatives while National Drug Law Enforcement Agency (NDLEA) deployed 9,447 personnel.
Yar’Adua said that when the numbers are put together and added to the number of election observers, it would be enough the determine the outcome of an election.
He said that the wide disenfranchisement raised concerns given the declining voter turnout saying that in 2015, voter turn out was 4.7 per cent, in 2019 it dropped 34.7 per cent and in 2023, 27. 3 per cent.
“To allow early voting for military personnel , it is not only a matter of fairness, it is a necessary step to restore confidence, engage young Nigerians and uphold the principle that says those who defend our democracy should not be excluded from it.
“I wish to encourage the Nigerian Army to collaborate with INEC in identifying eligible personnel to vote,” he said.
On his part, the Coordinator, Centre for Legislative Engagement, YIAGA-Africa, Dr Sam Ogwuche said that the bill was apt and timely.
He said that election is the hallmark of democracy and all Nigerians should be able to vote as it is a civic responsibility.
He said that YIAGA-Africa and many other stakeholders at the forefront of canvassing for increased citizen participation were in support of the bill.
The Federal Government has launched the Presidential Community Engagement Peace Initiative (PCEPI) to tackle insecurity in the North-Central region of the country.
The Tide source reports that the initiative is the brainchild of Mrs Abiodun Essiet, the Senior Special Assistant to the President on Community Engagement in charge of north-central.
Speaking at the event in Jos, yesterday, Essiet said that the initiative aimed at promoting peace and security in states within the region.
“This initiative is an innovative peace network aimed at driving the peace agenda and promoting social cohesion across the region.
“In recent times, these have witnessed troubling violence such as banditry, farmer-herder clashes, insurgency, kidnapping, among others.
“The challenges before the region are more serious and far reaching; the security situation has led to the tragic loss of lives and property.
“This incident demands a proactive and intriguing response, one that places communities at the corner of peace.
“This is why we are gathered here today to launch a new pathway through the Presidential community engagement on peace initiative,” she said
In his remarks, the Gbong Gwom Jos, Da Gyang Buba, called on Nigerians to pass down historical antecedents to the upcoming generation.
He said that such a move would give a better perspective towards addressing the lingering conflicts in the region.
Inaugurating the initiative, Gov. Caleb Mutfwang of Plateau said that the initiative would go a long way to promote peaceful coexistence in the region.
Mutfwang added that the initiative would also empower communities to take the lead in the peace building process of the Tinubu-led administration.
“This initiative is driven by the belief that peace is not only a goal, but a shared responsibility.
“We gather here at a critical moment in our national journey across our communities
“This initiative aims to empower communities to take the lead in conflict resolution and peace building, recognising that sustainable peace must be local.
“It will also build bridges of trust between citizens through shared commitment and dialogue,” he said
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