Nigeria begins 25 percent Executive Salary cut

Nigeria begins 25 percent Executive Salary cut
Hauwa Noroh-Ali,Abuja

The Nigerian Government says it has begun the implementation of the 25 per cent reduction in the basic salaries of members of the Federal Executive Council.

The cut is expected to reflect in their take-home pay for the month of January.

This move followed an earlier directive by President Goodluck Jonathan for the basic salaries of members of the Executive to be slashed by 25 per cent in the wake of the strike over petrol subsidy removal.

The move, according to President Jonathan, is to reduce the cost of governance.

The Minister of State for Finance, Dr. Yerima Ngama, confirmed the implementation of the directive, while briefing journalists shortly after the monthly Federation Account Allocation Committee meeting in Abuja.

“The process of salary cut has begun and it is taking effect from this January. As a matter of fact, the computation for the reduction of the 25 per cent had already been done by the Accountant-General of the Federation,” he said.

Also, at the meeting which began at 7pm and lasted till about 10.09pm local time, the committee agreed to ensure that civil servants got their salaries by January 20 as directed by the President. It shared 559.11 billion Naira, for the month of December 2011, among the three tiers of government.

The money is expected to cushion the effect of the increase in the pump price of petrol following the partial removal of subsidy on the product.
The 559.11 billion Naira, according to Ngama, will be credited to the beneficiaries’ accounts immediately.

Non inclusion of VAT

He said the amount excluded Value Added Tax of 57.1 billion Naira, which was not shared owing to the late arrival of the figure because of the strike.

Ngama, however, assured the members of the committee, who are commissioners of Finance from the 36 states that VAT would be shared today, Tuesday.

The minister, who addressed journalists shortly after the meeting along with the Accountant-General of the Federation, Mr Jonah Otunla, admitted that the industrial action affected the distribution of revenue for December 2011.

He said that the closure of banks for one week affected the gathering of information needed for the allocation of statutory revenue.

Ngama said the strike called by the organised labour had affected the speed with which some of the information needed was to be gathered for FAAC.

“This is as regards especially the information on internally generated revenue and Value Added Tax (VAT),” he said.

The minister said the committee received the confirmation of the total VAT collection for December during their meeting.

“The figure of 57.1 billion Naira for this was received from the Office of the Accountant General of the Federation as we were meeting,” The Minister said.

Funds from Subsidy removal

While speaking on the funds that will accrue from the partial removal of fuel subsidy, Dr Ngama said the federal government was optimistic its objectives would be realised.

“We do hope this year will be a prosperous year and we are happy that we are all united in ensuring this.

“We are hopeful that the entire various programmes we have developed and which we have discussed with the commissioners will be implemented successfully, particularly the SURE programme,” the Minister said.

According to Ngama, “We have asked the state commissioners to go and draw their own programmes from the revised amount that will be made known to them on the subsidy savings in order to ensure that our people get the benefit of the deregulation that we are embarking upon,’’.

The minister said the committee had already computed the savings from the subsidy removal, as well as what the savings would have been.

“But due to Monday’s change in the price of fuel, which has now made it partial deregulation and not full deregulation, the committee has to do the computation again,’’ he said.

Approval before disbursement

Ngama however said that the National Assembly would have to approve the allocation of the funds as a supplementary budget before the subsidy savings could be disbursed.

The Minister of State for Finance allayed fears on the country’s financial status saying “the total foreign reserve of Nigeria is over N32 billion US dollars, and a country with a foreign reserve of this amount cannot be a poor country but a rich country.”

He said that Nigeria had over 6,000 unfinished projects which would have led to borrowing to actually finish some of the road projects, such as the Abuja-Lokoja road.

“This particular project has been on for over five years, and in order to accelerate the development of the country we need to actually block out all inefficiencies,” he said.

Cokey