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More austerity measures coming – Okonjo-Iweala

By BusinessNews Staff on January 17, 2015

Following the continuous decline of the price of crude oil in the international market, the Federal Government on Thursday said it was preparing additional measures to mitigate the impact of the price drop on the Nigerian economy.

It also denied withdrawing the Medium-Term Expenditure Framework from the National Assembly, adding that the MTEF and the budget were with the lawmakers.

The Minister of Finance, Dr. Ngozi Okonjo-Iweala, stated these in Abuja while speaking at the launch of the Action 2015 programme, where she had a dialogue with school children of 15 years of age.

Action 2015 is an international movement to call for more action in the area of fighting corruption, inequality and climate change, and it is based on the believe that 2015 can be a pivotal year that will change the future.

The concert-styled event had in attendance celebrities such as Genevieve Nnaji, Samson Siasia, Dbanj, Timi Dakolo, Praiz, Marvellous Odiete, Nike Laoye and Jaiye Keys, who lent their voices to the call for inclusive growth.

Okonjo-Iweala said the country was facing a challenging time because of the developments in the global economy, adding that this had necessitated the need for additional austerity measures.

The minister did not provide details of the additional measures being planned.

She had during a public presentation of the 2015 budget proposal listed the stoppage of the purchase of new furniture, and reduction in international travels and trainings by government officials by 50 per cent as some of the austerity measures to be taken this year to boost revenue.

Others are the implementation of the Stephen Orasanye committee’s report on the rationalisation of the civil service; and introduction of 10 per cent tax on private jets, three per cent surcharge on champagnes and one per cent property tax on mansions with value exceeding N300m.

Between December 17, 2014 when the budget proposal was submitted, with oil benchmark price pegged at $65 per barrel, and now, global oil prices have further crashed to around $46 per barrel.

The development has further heightened tension in the country because of the Federal Government’s almost total dependence on crude oil exports for its revenue

Specifically, Okonjo-Iweala told the children that 2015 would be a very difficult year for the economy, noting, however, that with appropriate fiscal and monetary policy instruments, the government would manage the economy in a manner that would be beneficial to all.

She said although the country could have moved faster in achieving its goal in the past, a lot of efforts had been put in place to ensure that it achieved the Millennium Development Goals.

The minister gave an assurance that despite the challenges facing the economy as a result of the drop in oil prices, the government was prepared to respond with additional austerity measures.

She said since the budget proposal was with the National Assembly, the government was monitoring developments around oil prices in order to come up with appropriate measures once the decline got to the lowest point.

The minister said, “We have to provide an environment for the children to grow so that they can become leaders that will uphold the values that we need such as honesty, hard work, truth and valuing the country above self.

“Even though the oil price is going down, the budget is with the National Assembly. Let me just tell you that measures are being put in place so that we can manage the budget and the economy at whatever the oil price bottoms out.

“Right now, no one knows the bottom because it is falling every day. Once it stabilises and we know the bottom, we will accompany it with appropriate measures. So, we are working everyday with scenarios; we are following exactly the plan we told Nigerians.

“There are scenarios at $55, $50 and below of the additional measures that will be needed, and I believe that though this will be a very difficult year for the country, we have the tools, we know how to apply them and we know that working together, we will be able to take this country through this year and then to a brighter 2016.”

On what is being done to assist the poor to mitigate the difficult times, Okonjo-Iweala said although things might look tough at the moment, the government was building a platform on which it would assist those at the bottom of the pyramid.

She said. “For one to help lift people out of poverty, we are doing something that is technological, which is trying to give every Nigerian a smartcard and your generation will be the one to mostly appreciate this.

“It will enable us to target those at the very bottom once they have a card to be able to help them with some assistance that can assure basic health care and their children being in school through a conditional cash transfer programme and that programme is being put together by the President.

“These are some of the things that will target and include more people who are left out now.”

She said the government was working towards providing an environment for the children to grow so that they could become leaders who would uphold the values of honesty, hard work, truth and valuing the country above self.

[Punch]

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