As part of strategies to reduce cost of governance in the country, the federal government yesterday disclosed plan to reduce personnel cost from N1.8trillion in this year’s budget for N100 billion in 2016.
Minister of Finance, Mrs. Kemi Adeosun stated this when she appeared along with some other ministers before a joint committee of the Senate and House of Representatives on the Mid-term Expenditure Framework, MTEF, and Fiscal Strategy Paper, FSP, in Abuja.
Adeosuns said, “We are already working with banks so that we can go cashless, so that we could give debit cards to MDAs to procure items. If they want to buy fuel for instance, their drivers would make use of the cards”.
“We would be able to control the cards to know who and where the fuel was bought. We are really working hard to drive down overhead. If we don’t attack our recurrent, the risk is that extra money goes into it and we will have nothing to show for it, this is a big risk that we cannot afford,” she explained.
On borrowing, she said the government was already speaking with some of the lenders, assuring that the money would be tied to capital projects, adding that much of the concessional money were project tied.
Adeosun, while also explaining the projected N1.5trillion revenue for 2016, said “we have done N401billion into the consolidated revenue fund this year, but when I look at it, about 60 percent of it is from the CBN.”
Also speaking, Minister of Budget and National Planning, Mr. Udoma Udo Udoma said that the strict economic measures were being put in place due to the present realities in the country.
Udoma pointed out that it was important that substantial reductions were made on the spending pattern to be able to usher in the change that was expected.‎
“In preparing the MTEF, we seek a dramatic shift from spending on recurrent to spending on capital aspect of the budget.
It is going to be tighter for everybody. All non essential expenditure would be cut out.‎ We will reduce the overheads by seven per cent.
“We are beginning a journey of ‘change’ and change has to start with the clarity of purpose of where we are going‎,” he stressed.
The Central Bank of Nigeria, CBN, governor, Mr Godwin Emefiele said the apex bank would strengthen the naira against the current exchange rate of N260 per dollar at the parallel market and official rate of N197.
“The truth is that historically, exchange rate for budget has never been based on the parallel market rate which as far as we are concerned is a shallow market because it controls about five percent of the market. The market is substantially dominated by speculators and rent seekers.
“In the last 12 to 15 months, we have seen a massive drop in commodity prices, especially oil that affects Nigeria has significantly affected the country’s revenue.”
Minister of State for Petroleum Resources, Dr Emmanuel Ibe Kachikwu disclosed that from August this year, the country had been exceeding two million daily production of oil through stringent monitoring of production by getting quick fixes to instances of pipelines breaking.
“The internal projection for our system next year is in excess of 2.4million which is coming from enhanced and increased production from NPDC field,” he said.
On the oil price benchmark of $38, he said, “The projection at OPEC was along the line of the fact that once we do not interfere in term of production cost will lead to a southward movement in terms of pricing.
“We expect an increase as from early January when we expect it go up by $45 to $50 per barrel in spite of OPEC projection. We expect it to hit $70 per barrel in 2017,” Kachikwu added.


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