Minister for Finance and Coordinating Minister for the Economy, Ngozi Okonjo-Iweala, has announced actions to be taken by the Federal Government in cushioning the effects of slump in crude oil prices on the Nigerian economy. She told journalists Sunday that Nigerians would be taxed on luxury goods consumption while government would cut expenditures on travels by public servants and develop the non-oil sector. Key cabinet members at the briefing, where the Federal Government spoke about its multi-prong approach to tackling the issue, include the Accountant-General of the Federation, Mr. Jonah Otunla; Director-General, Budget Office of the Federation, Dr Bright Okogu and the the Acting Chairman, Federal Inland Revenue Service, Alhaji Kabir Mashi. Okonjo-Iweala said unlike before, Nigeria has the intellectual resource to deal with the situation. “Every country that is well managed doesn’t just seat and allow a situation to happen to them. If they are well managed, they prepare the right set of policies to deal with the situation," she said.
Okojo stated: “Those days when we used to be like that in the ‘80s and 90s are over. In the ‘80s, when we had shocks, we didn’t take measures by ourselves to adjust. We waited for others to come and tell us how to adjust. But now we have competent teams and our job is not to sit and wait, but, to craft a set of policies and that will help us address these shocks.
“We are not talking about (cutting) salaries and benefits. We are talking of trainings and travels and these will be only for critical and essential items which will be pre-approved by the Head of Service and the Director-General of the Budget Office and then if someone invites you for overseas course, you can go provided they pay for your training and your stay and you have to furnish evidence that they are paying before you will be allowed. She assured "we will manage the economy in a transparent manner so that people need not have any fear.” The Minister also spoke of streamlining the federal responsibilities and said the government is giving thoughts to the recommendations of a ad-hoc committee on scraping and merging federal agencies, headed by former Head of Service, Steven Oronsanye committee.
“We found that a lot of these agencies are underpinned by law and we discussed with the National Assembly and they are willing to look at how their laws can be repealed. So this is also part of our medium term measures,” she said. While aiming to boost non-oil revenues further, block loopholes d waste, the Finance Minister added that oil benchmark for preparing the 2015 budget was reduced by a $5 per barrel reduction from $78 to $73 per barrel. “As part of the response, the Medium Term Expenditure Framework and the Budget 2015 proposal to the National Assembly have been revised. Government is now proposing a benchmark of $73 dollars per barrel to the National Assembly compared to the earlier proposed benchmark of $78," she explained.
Okojo-Iweala said more: "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." She said agriculture and housing sectors would be strengthened also.
Okonjo-Iweala said of the $4.1bn (N656bn) in the Excess Crude Account, $2bn (N320bn) would be withdrawn between now and the end of this year to take care of critical expenditure. She explained that government would not print new naira notes, as such would spur inflation, citing the experiences of Germany, Argentina and Zimbabwe at different times.