The minister of finance, budget and national planning, Mr. Zainab Ahmed, has allayed fears of job loss as the federal government considers implementation of the Stephen Oronsaye committee report.
The Oronsaye report which was submitted in 2011 stated that there are 541 federal government parastatals, commissions and agencies (statutory and non-statutory); 263 of the statutory agencies should be reduced to 161; 38 agencies should be abolished; 52 agencies should be merged while 14 should revert to departments in ministries.
Speaking on ‘Good Morning Nigeria’ aired on the NTA yesterday, the minister said the government was not planning to sack its employees order to save funds.
She repeated President Muhammadu Buhari’s resolve that no worker would lose their job.
However, the minister said the government would rather encourage people to resign by incentivising them.
She said the government would reduce overheads by ensuring that government agencies are merged.
“Mr. President doesn’t want to disengage staff. That is what he has directed from the beginning of his administration. He also directed that we pay salaries. The Federal Government has never failed in paying salaries and he said we must always pay pensions.
“So, he has been consistent in those directives and we have followed those directives to the letter.”
Explaining how the government would cut personnel costs, Ahmed said, “Well, we do hope that at the end of the exercise, some agencies will be merged and it will cut down operational costs.
“And also we will be able to come up with incentive packages to retrain people and redeploy them in some areas where they are useful. For example, we still have a very high need for teachers so we can retrain people and send them to teach but also incentive packages to exit. Again, that is also money. If you want people to exit you have to pay them.
“That is an incentive package so that they can go. That is why it is taking a lot of time because it is not easy to decide on this. Everything centres on resources. We need resources and if we had a lot of money, we would just give very beautiful incentive packages and people would exit and go and start their businesses and we would reduce the size of the personnel cost.”
She also hinted that the government was planning to increase the rate of value added tax paid by Nigerians, barely two years after the tax was increased from five per cent to 7.5 per cent.
She stated that at 7.5 per cent, Nigeria has the lowest VAT rate in the African region.
“7.5 per cent VAT is the lowest in Africa, and it is about 50 per cent of the sub-Saharan African average which is about 15 per cent, so we are still very low.
“Yes we have to increase VAT at sometime going forward, we can’t stay at 7.5 per cent when we want to increase our revenue.
“At some point, I am not saying this year, because we didn’t make provision this year,” said Ahmed.
She added that the government made no provisions for the increase in the Finance Act 2021 because of the VAT controversy between the federal government and state governments.
“So we must stay clear until things are settled,” she added.
Ahmed explained that while there were no plans to increase Company Income Tax, the government was considering raising the rates of some levies.
She said the government was seeking to grow its revenue to 15 per cent of the country’s gross domestic product to achieve a healthy economy.
“We, in government, are concerned about the borrowings that government has been doing.
“But we will continue to restate that our debt levels are within sustainable limits but the challenge that we have is that of revenue, so we will keep working to increase revenue and cut out any wasteful expenditure because cutting the size of expenditure is currently not a viable option.
“We have to grow our revenue from nine per cent to 15 per cent of the GDP, that is when things will become healthy for us as a country,” she said.
With Punch report
