Kaduna govt. announces new austerity measures

Kaduna govt. announces new austerity measures

Wednesday, March 18, 2020 6:54 pm

Nasir-El-Rufai: Kaduna State Governor

Kaduna State Government has adopted stringent measures to enable it manage the unexpected economic consequences unleashed by the coronavirus pandemic.
 This was contained in a statement issued  by Mr Muyiwa Adekeye, the Special Adviser on Media and Communication to the state governor on Wednesday  in Kaduna.
Adekeye said that the measures were adopted in anticipation of the steep decline in revenues.
He said that the belt-tightening measures were adopted following a robust debate on the interim report of the Economic Crisis Committee at a meeting chaired by the state Governor, Nasir El-Rufai.
According to the statement, the Governor had received an interim report from the economic crisis response committee established on March 9, 2020 by the Kaduna State Executive Council.
The Committee consisted of selected members of the Executive Council, with Economic Development Council chairman Jimi Lawal, assisted by Infrastructure Development Council chair Muhammad Sani Abdullahi.
“The interim report was discussed at a meeting chaired by the Governor and attended by the Deputy Governor Dr Hadiza Balarabe, and senior appointees of the state government.
“The scenarios reviewed indicated that Kaduna State’s gross annual revenues could fall by as much as N17bn if crude oil prices remain around $30 per barrel.
“The state’s annual revenues could fall by as much as N24bn in 2020 if crude prices fall to $20 per barrel.
”Either of these scenarios will imperil the discharge of obligations to personnel, pensioners and running of the government.
”Also Capital projects implementation will be severely curtailed if either of the two oil price scenarios persist except fiscal and monetary policy realism is adopted by the Federal Government.”
The statement further revealed that Kaduna State will now prioritise capital projects, especially those in the Health and Education sectors as well as infrastructure but will nonetheless uphold social safeguards like the minimum monthly pension of N30,000.
“The state will also strive to remain afloat by cutting costs and expanding revenue sources such as presumptive tax, land use charges and development levy,’’ the statement added.
It also revealed that the state government will cut overheads expenses by 50 per cent and centralise expenses like buying of fuel and stationery.
The state government “will also introduce debit cards as the sole mechanism for funding overhead expenses of MDAs. This will promote transparency and limit expenses.’’
According to the statement, ‘’measures will be taken to promote payroll integrity and ensure that the nominal roll of the public service is accurate.
”In the interim, the Head of Service will issue a circular that removes all cases of duplicate BVNs from the state payroll.
‘’Public servants who do not present evidence of their Retirement Savings Accounts (RSAs) will also be temporarily removed from the payroll,’’
It added that the  government “will conclude its ongoing recruitment process, but resumption of new recruits will be put on hold until the fiscal situation is clearer.’’
The statement further said that foreign trips have now been suspended.
According to statement, Nigeria may witness the biggest economic crisis in recent history if the problem persists.
‘’It is a matter of urgency that a sub-national like Kaduna State should seriously consider and adopt measures to manage a dangerous economic moment.
”The state will also broadly engage with the Federal Government on monetary and fiscal measures that will be required to manage the shocks.’’
‘’With crude oil prices falling, FAAC will certainly shrink considerably in the near-term and the severity of the resulting contraction may significantly limit IGR as well,’’ it added.
“Kaduna state government will continue its effort to reduce dependence on revenues from FAAC. It will also continue to assess the financial situation of the state and will not hesitate to impose further belt tightening measures, if necessary,’’

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