Federal Government (FG) has been advised by governors to pay off Civil Servants, and others above 50 years. The suggestion was said to have come as indications emerged that the nation may be teetering toward the cliff of economic collapse.
President Muhammadu Buhari approved the release of the fund on February 22, this year. Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, justifying the decision, said while Nigerians have the right to ask questions, President Buhari, who approved the purchase, also has the right to make his assessment of situations and act on them accordingly.”
Lawmakers should rather be dismissed or be paid off; while Nigeria recruits citizens who are willing to accept to be on volunteer or part-time services as a sacrifice to the nation. — Adesanya-Davies
News reports of today August 5, 2022, reveal that Federal Government (FG) has been advised by governors to pay off Civil Servants, and others above 50 years. The suggestion was said to have come as indications emerged that the nation may be teetering toward the cliff of economic collapse.
Reacting to the issue, former Presidential Candidate Funmilayo Adesanya-Davies responds that, “lawmakers (Senate, the upper chamber and House of Representatives, the lower chamber), in Abuja as well as, House of Assembly members who earn armed-robbery salaries should rather be dismissed or be paid off; while Nigeria recruits citizens who are willing to accept to be on volunteer or part-time services as a sacrifice to the nation.”
She added that “this would immediately instil fiscal discipline and prevent the nation from the perceived imminent economic collapse, as all hands must be a deck. The governors should also be reminded that most of them fall within the same age bracket of 50 years and above, and their huge salaries would be better stopped to rescue the nation from economic distress rather than the poor meagre salaries being paid to Civil Servants. What is good for the goose is said to be good for the gander.”
It was reported that “Nigerian governors have advised the federal government to offer federal civil servants who are older than 50 years a one-off retirement package to exit the service, as part of coordinated efforts to instil fiscal discipline and prevent the nation from imminent economic collapse. The governors proposed at a meeting with President Muhammadu Buhari in July, that PREMIUM TIMES gathered from sources privy to details of the meeting.
The proposal also urged the government to begin implementation of the updated Stephen Oronsaye Report, which suggested the merger and shutdown of agencies and parastatals with duplicated or contested functions as a way to address bureaucratic inefficiency and reduce the cost of governance.
Officials familiar with details of the meeting said explained that the governors were concerned about the deteriorating state of the economy and a proposal to restore fiscal discipline was presented to the federal government.
The federal civil service employs just about 89,000 people but will spend about N4.1 trillion on personnel costs this year, from its N17 trillion budget for the entire country. It is not clear how many workers are above 50 years of age, or how much goes to them.
Last week, details emerged that the balance in Nigeria’s Excess Crude Account had depleted significantly from $35.37m to $376,655, leaving the nation with no buffers to stabilize the economy and its currency. Yet another indication emerged recently that the nation was broke as debt service surpassed revenue.
According to details of the 2022 fiscal performance report for January through April, Nigeria’s total revenue stood at N1.63 trillion while debt servicing stood at N1.94 trillion, showing a variance of over N300 billion.
‘Fiscal Discipline
As part of measures to restore fiscal discipline, the governors advised the federal government to reduce expenditure immediately by eliminating petrol subsidy and NNPC-funded projects, cap the Social Investment Programme (SIP) and National Poverty Reduction with Growth Strategy (NPRGS) budgets to N200 billion, eliminate extra-constitutional deductions from FAAC and reduce SWV items for SDG and NASS Constituency projects.
The governors also asked the government to reduce duplications (e.g. empowerment programmes) and waste, reduce 1% granted to NASENI to 0.2%, amend the Act in the 2022 Finance Bill, reduce personnel costs of federal government MDAs, and expedite the privatization of non-performing assets like the NDPHC power plants.
Similarly, the governors urged that the 2023 – 2025 MTEF should reflect the suggestions and the government’s commitment to restore fiscal discipline while the planned 22% increase in salaries in 2023 is reconsidered. They added that the fiscal deficit should be reduced to no more than 2% of GDP in 2023 – 2025.
To conserve foreign exchange and grow the reserves, the governors suggested that foreign trips by MDAs, including budgetary-independent agencies such as FIRS, NPA, NIMASA and NCC, be put on hold for at least one year. They also urged the Ministry of Foreign Affairs not to issue requests for Visas to foreign embassies for federal government officials and their families, unless express approval is granted by the presidency.
They also suggested the movement from State Income Taxation to Consumption Taxation, adding that with the introduction of 3% Federal Income Tax, state-level PIT should be abolished.
Similarly, they suggested that state Sales Taxes (flat rate of 10%) should be enacted for the 36 States and FCT, VAT levels increased to 10% with a timeline to raise it to between 15% and 20%, as well as re-introduction and passage of VAT into the Exclusive List. It was not clear whether all governors agreed with the position on VAT being moved to the exclusive list.
To improve tax revenues, they suggested that the federal government should introduce a flat 3% Federal Personal Income Tax on all Nigerians earning more than N30,000 per month, adding that persons earning less than N30,000 per month whether employed or not, including farmers and traders, should pay a monthly FPIT of N100. Similarly, telecoms firms and NIMC should collaborate to ensure deduction of this from phone credit of individuals and linking to NIN and BVN.
The governors also suggested centralization of the collection of all federal oil and non-oil taxes in one agency, the FIRS, while Customs, NPA, and others assess and issue demands. They suggested that the Federal Government improve crude oil and gas production, resolve lingering issues of ownership of gas in PSCs (eg Nnwa-Doro, OML 129) to help position Nigeria to take advantage of the gas needs in Europe, and provide incentives to expedite development of vandalism-resistant deep offshore fields like Bonga SW (Shell), Preweoi (Total), Zabazaba (ENI) and Owowo (Exxon).”
In conclusion, while commending the governors for most of their thoughtful recommendations, Adesanya-Davies opines that “their thoughts are rather incomplete as the governors know that they must lead by example and as such, the governors and law makers’ salaries and allowances should be the first point of contact to be visited to rescue the economy of our dear nation.
It is unwise and unfair to further drain the dependent families of Civil Servants in the face of the current poverty rate and lack of basic needs including food, clothing and shelter amongst others already de-generating into full insecurity.
In another development, “The Federal Government, yesterday, justified approval of N1,145,000,000 for the purchase of vehicles for the government of Niger Republic. This came after Nigerians expressed outrage over the action exposed by a popular social media influencer, David Hundeyin.
President Muhammadu Buhari approved the release of the fund on February 22, this year. Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, justifying the decision, said while Nigerians have the right to ask questions, President Buhari, who approved the purchase, also has the right to make his assessment of situations and act on them accordingly.”
