1 Comment » February 11th, 2009 posted by // Categories: Nigeriawatch




Yar’Adua, Governors, Political Appointees to Take Salary Cut

From Juliana Taiwo in Abuja, 02.11.2009



Economic Meltdown

In an unprecedented bid to curtail government spending amidst the global economic meltdown, Pre-sident Umaru Musa Yar’Adua yesterday announced a proposal to slash his salary, that of the Vice-President and the members of his cabinet.

Those expected to be affected include governors, as well as state and council political office holders.

The percentage of the proposed cuts were not immediately made public, but he said the current remunerations were “untenable and unjustifiable” in the present circumstances, thereby necessitating his forwarding a letter to the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) to consider taking necessary action on the matter.

Shortly after the announcement, governors rose from the meeting of the National Economic Council (NEC) to endorse the proposal.

Nigeria’s situation is worsened by the sharp drop in crude oil prices from nearly $150 per barrel in July last year to the current $41, given the country’s budget benchmark of a price of $45 per barrel.

Oil exports account for 95 per cent of Nigeria’s foreign exchange earnings and over 80 per cent of Federal Govern-ment’s revenue.
Addressing State House Correspondents yesterday, the Special Adviser to the Presi-dent on Media and Publicity, Mr. Olusegun Adeniyi, said Yar’Adua made the call for sacrifice in a meeting with ministers, special advisers, senior special assistants and special assistants in his administration.

He also said the President had issued a fresh call on all public office holders serving in this administration to exhibit much greater “honesty, dedication and commitment to selfless national service in the discharge of their official responsibilities”.

President Yar’Adua, Adeniyi said, urged public office holders to be prepared to make “personal sacrifices for the greater good of the nation”, adding that in furtherance of efforts to come to terms with the realities of the ongoing global economic recession and ensure that national development is not too adversely affected by it, he had initiated action on the “drastic” downward review of the salaries and allowances of all political office holders in the country.

The President said that despite the fresh challenges to national development which it had thrown up, the current global economic crisis would also provide fresh opportunities which insightful and perceptive leaders at all levels could utilise to ensure that Nigeria’s 20-20-20 vision is not derailed.

Yar’Adua said he had confidence in the capacity of Nigerians to seize the moment by using current challenges to reposition the country for peace and prosperity.

Last April, the National Assembly approved a new salary structure following the passage of a bill on the Salaries and Allowances of certain political, public and judicial office holders Act 2002 and Other Matters Connected thereto, 2008, signed by the Harmonisation Commit-tee of the Senate and the House of Representatives.

Under the new dispensation, the basic annual salary of the President was put at N3,514,705 as against the former N1.405 million.

This is besides allowances which bring the total remuneration of the President in a year to N10.899 million.

The salary for Vice-President Goodluck Jonathan was put at N3,031,572.50.

Last August, the RMAFC increased the basic salaries of legislators across the federation to align with those of the executive. The 100 per cent was backdated to 2007.

RMAFC said the increase was based on certain indices, including “external reserves, GDP, growth rate, rate of inflation and “the need for a living image”.

Meanwhile, the NEC Council has endorsed the salary cuts proposed by the President.

It has also shifted to March 10 the concluding discussion on the sharing formula amongst the three tiers of government of the $4 billion excess crude.

Briefing State House Corres-pondents at the end of the meeting chaired by Vice-President Jonathan, the Gover-nor of Gombe State, Danjuma Goje, in company with the Benue State Governor Gabriel Suswam, the Central Bank of Nigeria Governor Chukwuma Soludo, and the Finance Minister, Mansur Muhtar, said the decision to endorse the planned salary cut was to help ameliorate the effects of the current economic crisis on the country.

“At the conclusion of the meeting of the National Economic Council, as a body empowered to advise on economic issues in the country, we reviewed the state of the economy in Nigeria and have reached certain conclusions.

“First, we will talk on an issue that is very current. You know the National Assembly is discussing the issue of minimum wage and today Mr. President has directed the Revenue Mobilisation and Fiscal Allocation Commission to review downwards the salary of all political office holders, beginning from himself down to the lowest person who maybe the councillor.

“As part of our contribution in view of the economic meltdown, after deliberation at the Council, we have wholly endorsed the directive of Mr. President and are calling on the Commission to review downwards the salaries of all political office holders. And we hope this will go a long way in reducing public expenditure in view of the dwindling resources available to government,” Goje said.

Commenting on the excess crude, Suswam said $4 billion was declared by the Ministry of Finance as money available for sharing by the three tiers of government.

He, however, noted that the money was nominally distributed by the ministry and stated that the decision to or not to share the money would be taken by the council in its next meeting.   

“Also discussed was the issue of excess crude which you know has been a contentious issue between the state and the Federal Governments. But because we have discussed other very important national issues, this issue was not concluded but the Minister of Finance gave us a nominal distribution of the excess crude as it stands against various states, and the total is about $4 billion and this will be discussed in the next meeting which is slated for March 10th.

“Now it is nominal distribution, each state now knows that the money is there but you cannot reach [touch it] but the issue now is whether the governors and the ministry of finance will agree that the money be distributed. The excess crude account was created by the National Assembly in 2004 and the essence was to enable us save some funds for the rainy day and that has subsisted up till now but that money in actual sense belongs to the three tiers of government. And because it is money that belongs to the three tiers of government, each tier needs to know its share, so that is the essence of the nominal distribution. Now having known what is accruable to each tier, it is for us to sit down and agree as to whether we can take the whole of the distribution or some will be left behind for another day,” he said.
Also commenting on the National Integrated Power Project (NIPP), to which a presidential committee comprising governors from the six geo-political zones are members, Suswam said the committee would make a comprehensive report to NEC before making its findings public.
“Myself, the governor of Gombe and the Minister of Finance who are members of the presidential steering committee on NIPP, have been directed by Council to make a comprehensive presentation to council on March 10th and until that is done I might not be in position to let you in on the major decisions in the last three meetings. I will be able to brief you after I would have made a comprehensive presentation to the economic council,” he said.

Muhtar expressed the council’s displeasure over the economic growth rate in 2008 and noted that the council had agreed to take drastic measures to ensure that the 2009 budget achieves significant results.

He disclosed that the issue of the sliding exchange rate of the naira against other foreign currencies, the crisis in the capital market, and the issue of the falling crude oil prices were also tabled at the meeting with a resolve by the NEC to take immediate actions that would help “mitigate” the problems.

“We had the chance to review the performance of the economy and the prospect of going forward. It was agreed that the macro economic performance in 2008 has been mixed with overall growth falling below expectations. There had been emerging challenges relating to inflation, exchange rate and interest rate management as well as the capital market sector and by extension the banking sector.

“The prospect of going forward given that the global environment does not appear to present a very bright picture, I will agree that we need to see how we can mitigate the likely risk that might arise especially from fallen oil revenues. But the other challenge that we have highlight is that the cost of doing business which is considered very high both because of the infrastructure constraints, power and transport as well as soft infrastructure such as port congestion. We agreed on some of the issues that need to be done particularly restoring the culture of proper planning, ensuring that we have effective coordination with the states both horizontally and vertically within government agencies and with the state, enhancing revenue mobilisation, effective budget execution.

“Looking at the cost of doing business, the port congestion thing attracted a lot of debate. There is growing concerns of what has been happening in the ports in the last couple of months, the acute port congestion which is impacting on our ability to trade effectively and also on revenue collection as well as the manufacturing sector has been a major source of concern.

“During the course of the meeting, I briefed the council on what the Federal Government joint inter-ministerial task force headed by minister of transport and with minister of finance as member have been working on. I have given the update, but the understanding is that we will brief the council at the next meeting about the progress that has been made and if need be any corrective measures. We are looking at the structural issues that need to be addressed both long-term and medium-term and short-term issues that need to be undertaken that need to address the problem that we are confronted with in relations with sports,” he said.

Also commenting, Soludo said though the council noted that non-oil sector, especially the agricultural sector, led the economy in 2008 with a 6.4 per cent growth, the body lamented that the sector barely enjoyed a three-per cent credit from the banking sector and disclosed that in the next one month, the government would put together a significant financial package that would benefit the sector.

“The review of the macro-economic developments showed particularly that the latest revised estimates by the National Bureau of Statisticsare that the economic growth was about 6.4 per cent last year and this was led essentially by the non-oil sector, especially agriculture. And since agriculture is the dominant sector of the Nigerian economy today, it is the sector that holds the key for both employment, inflation, for inflation to come down you need agriculture to do very well and to increase productivity. It is the largest employer of labour and in terms of output it also contributes the highest to national economy.

“It has been so over several years and will probably hold the key for Nigeria to navigate through the current economic global and financial crisis. So consequently, council deliberated very seriously on the challenges facing the sector and especially given credit to that sector by the commercial banks seems to be the least, it contributes about 40 per cent to our GDP but the share of the aggregate credit is barely not more than three per cent. Consequently, we discussed the possibility that within the next one month, we will be working together in the Central Bank, the Ministry of Finance, Agriculture to put together a plan to be able to raise a significant dedicated fund that will go to agriculture. This is of essence so that farmers since we are almost in the farming season, will have this money available to them and encourage employment and lower inflation this year,” he said.

N29 million
Approximately the annual salaries and allowances of each minister

N28 million
Payments to each of the 109 senators in a year

N22 million
Payments to each member of the House of Representatives in a year

N1.4 billion
Estimated total payments to presidential aides in emoluments in a year
N593 billion
Total yearly payments to council chairmen/women and councillors in Nigeria’s 774 LGAs

N36 billion
Total salaries of House of Assembly members across the 36 states

N1.3 trillion
Estimated annual salaries, allowances and fringe benefits of Nigeria’s political office holders at all tiers of government.
Source: RMAFC

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One Response to “Yar”

  1. abdullahi says:

    please nigerian leaders remember God is seeing you.

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