The Nation Newspaper

Tag: slash

  • Presidential pay slash

    Presidential pay slash

    •What is more important is discipline and curbing extravagant lifestyle

    President Muhammadu Buhari and Vice President Yemi Osinbajo recently declared their intention through an official memo with reference number PRES/81/SGF/17 to voluntarily slash their salaries by 50 per cent of what the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC) statutorily allotted to their posts. This is to us a glib approach to an endemic problem of waste in public life.

    President Buhari’s current annual remuneration as approved by RMAFC is put at N14, 058,820.00. By halving his salary, Buhari will be earning in each year of his four-year administration tenure life span, the sum of N7m. The same applies to Osinbajo who earns N12,126,289.8 per year, which at half salary translates to N6,063,144.9 per year. Apart from these remunerations, the president and his deputy are entitled to various regular allowances like: hardship allowance which translates to 50 per cent of their basic salaries and consistency allowance which amounts to 250 per cent of same basic salaries.

    But the important question at this juncture is who determines whether the president/deputy is consistent in the discharge of their duties; and also what type of hardships are the president and his deputy faced with in the discharge of their duties? This is one fundamental dilemma faced by a country in search of a realistic remuneration package not only for her executive arm of government but the legislative and other appointive positions in the land.

    This season of salary slashing calls back to former President Goodluck Jonathan at a point during his administration when the price of crude oil slumped. He reduced his salary by 30 percent. This he did despite the fact that his administration witnessed the highest level of crude oil theft and other extreme corrupt practices without any known significant attempt to nip such in the bud. In the end, such publicity stunt stands for its symbolism and not substance because nothing really changed. Under the current dispensation, it is also on record that the governors of Abia, Kaduna and Kano states, amongst others, reduced their salaries but the public sees that as another publicity trick that would not positively impact on the lives of the common man.

    Sadly, the executive and the legislative arms of government are only able to maintain a greedy and ostentatious lifestyle of buying private jets and building grandiose houses of opulence and procurement of bullet-proof vehicles because of the odious slush funds at their disposal. What ought to be done is for them to slash the diverse allowances like security vote, hardship and consistency allowances, including travelling estacode, amongst others, such that the wage bills of the states and the centre government would drastically be brought down. So far, public officers’ allowances account for the bulk of their financial entitlements, creating in the process a heavy toll on public till.

    The RMAFC is statutorily empowered by Section 32 (d) of Part 1 of the Third Schedule of the Constitution to determine the appropriate remuneration for political office holders. Consequently, we call on this statutory body to come up with a pay package for all arms of government, which reflects the economic reality in the polity. We do not subscribe to perquisites of office that are adhoc or individualistic like the current executive/presidential salary cut initiatives. We want realistic meaningful salary structure for elective and appointive officers of state but we abhor remuneration excesses and ostentation that are insensitive to the prevailing economic realities. That is what RMAFC should curtail without further delay. The Buhari administration may mean well by the salary slash, but we need greater show of discipline in public life.

  • Buhari, Osinbajo slash own salaries by half

    Buhari, Osinbajo slash own salaries by half

    President Muhammadu Buhari and Vice President Yemi Osinbajo are to receive only 50 per cent of the salaries paid to their immediate predecessors, and this is official.

    The President is entitled to an annual basic salary of N3,514,705 or N292,892.05 per month under the Remuneration package for Political, Public and Judicial Office Holders of 2007 issued by the Revenue Mobilization Allocation and Fiscal Commission (RMAFC) ,while the Vice President’s salary is N3,031,572.50k per annum or N252,631.04k per month.

    The President’s Senior Special Assistant on Media and Publicity, Mallam Garba Shehu, said yesterday that the Permanent Secretary of the State House, Mr. Nebolisa Emodi had already communicated the development to the office of the Secretary to the Government of the Federation.

    “I write to forward the completed IPPIS registration form of Mr. President and to draw your kind attention to Mr. President’s directive that only 50% of his salary be paid to him,” Mr. Emodi said in a memo with reference number PRES/81/SGF/17.

    The slash may not be unconnected with the current economic situation in the country.

    Apart from basic salary, the president and the vice president are also entitled to hardship and constituency allowance which bring their total remunerations to N14,058,820 per annum or N1,171,568.20k per month for the President and N12,126,290 per annum or N1,010,524.16k per month for the vice president.

    Governors Rufai el-Nasir (Kaduna),Mohammed Abubakar (Bauchi),Abdulahi Ganduje (Kano) and Okezie Ikpeazu had earlier cut their own salaries and those of all political office holders in their respective states as part of the efforts to cut costs.

    First to do so was el-Rufai on his first day in office.

    He said his action was a mark of his sacrifice to develop the state.

    He described the financial situation in the state as difficult, adding: “as soon as we have all the facts in coming weeks, we shall lay bare to you just how deep a hole we have dug ourselves in the past several years.

    “Our finances are in a shambles. Kaduna is the second most indebted state in our country. Our state is staggering under the weight of billions of naira in debt and other liabilities. As we all know, merely by walking the streets or seeing our neighbors everyday, the state of our state is abysmal. Our schools and hospitals, our roads and bridges, our villages, towns and cities, all are markers of backwardness.

    “Too many of our children are hungry and in rags and in the street.”

    In slashing his salary,Gov.Ikpeazu lamented the inability of the state to pay workers’ salaries,saying he decided to personally identify with the suffering workers and would not lift the self-imposed austerity until the salaries and allowances owed workers were cleared.

    On his part, Gov. Abubakar said: “As a mark of leadership by example, I hereby offer to reduce the salary to be earned by the Deputy Governor and myself by 50 per cent. This is our promise to the people of Bauchi State. This is the bond for which we shall be held to account. This is the commencement of the many years of greatness that await our dear state. This is the path on which we require your fervent prayers, support and contributions.”

    Gov Ganduje said the present economic reality in the country required efforts to cut waste.

  • No plans to slash salaries, says Okorocha

    No plans to slash salaries, says Okorocha

    Imo State Governor Rochas Okorocha has denied reports that his government plans to cut salaries of public servants by 30 per cent.

    He described as unfounded, allegations that an audit of workers will be done to reduce the workforce.

    A statement by his Chief Press Secretary, Mr. Sam Onwuemeodo explained that the office of the Head of Service is collecting civil servants data for record purposes, which is different from staff auditing.

    The statement reads: “This is to inform civil servants that the Rescue Mission Government or the governor did not order a 30 per cent salary cut as being speculated, and has no plans to do so.

    “It is also not true that the state government is conducting staff audit of civil servants for the purpose of reducing the workforce. The office of the Head of service only embarked on the collection of individual data for record purposes. The exercise is different from staff auditing.

    “Our governor is known for humanitarian gestures and does not engage in any venture that would cause pain to individuals and groups in the state. That is why for the first four years of his administration, he tolerated street trading, illegal motor parks, rampant erection of kiosks and others until now,  but the situation has gone out of hand and calls for action.

    “It is also important to let the people know that those who are not happy with the victory of Governor Okorocha in the election are behind these rumours. Before now, they said the governor had scrapped free education, and banned Keke Napep. This time, they have come up with the falsehood of the government cutting salaries by 30 per cent and working to reduce the state work force.

    “All these are unintelligent lies that are neither here nor there and we appeal to the people to disregard such lies. All these are blatant lies. Governor Okorocha loves the people and will not take any action that would affect them negatively”.

  • The fuel price slash debate

    The fuel price slash debate

    •This is unnecessary; FG should get more refineries on board

    In the heat of the clamour by a broad section of Nigerians for the reduction of fuel prices last December, finance minister, Ngozi Okonjo-Iweala, had reportedly told those behind the agitation to wait until oil prices plunged below the $60 mark to have their wish. According to her: “preliminary estimates show that the break-even crude oil price at which the landed cost of PMS will equal our current price of N97 per litre so that there will no longer be subsidy is about $60 per barrel … It is only when the crude oil price (Bonny Light) falls below this level that the pump price of PMS (which includes N15.49 per litre distribution and Petroleum Equalisation Fund cost) can begin to come down”.

    On Monday last week, that moment came to fulfillment: the global benchmark Brent crude closed at $57.94 per barrel–more than two dollars ($2) below the threshold announced by the minister. The same oil sold for $115 a barrel (a reduction by more than 50 percent) in June last year – a little more than six months ago. Today, many oil producing countries have since reflected the new reality in their domestic fuel prices. These factors, including the fact that fuel price is known to be higher in Nigeria than all other OPEC members except Angola obviously makes the case for price reduction compelling at this time.

    Now, what is the Federal Government’s case for retaining the present pump price? The most obvious explanation is that the government believes that the current prices would be temporary. The other explanation stems from what the Petroleum Products Prices Regulatory Agency, (PPPRA)’s figures indicate. We refer to the PPPRA’s Expected Open Market Price (EOMP) template for Premium Motor Spirit (petrol) of last week which read N97.90 – meaning that the government still believes that there is a N0.90 kobo subsidy on petrol price. These apparently appear to inform the government’s strategy of treading cautiously on the matter of the current pricing template. There is a possible third factor – the possibility of shoring up government revenues from the differentials.

    But should these suffice to deny Nigerians of the benefit of a price reduction? We do not think so.

    However, it would appear that the issues are far more fundamental than the current fixation with fuel price reduction would ever sufficiently capture. Indeed, the issue of fuel price reduction merely underlies a profound pathology – the astounding myopia that has afflicted government’s policies in the downstream sector. It starts with the regime under which the Federal Government has long abdicated its responsibility to some dark invisible market forces. It extends to the rent-laden PPPRA template under which the nation is fleeced of billions annually. The pathology explains why OPEC’s sixth largest producer cannot refine sufficient crude for its domestic requirements; it explains the presence of  hordes of speculators and rent-seekers in the fuel distribution chain. It explains why the government would retain N458.68 billion in the 2015 budget to fund subsidy claims. The pathology – unfortunately – is at the heart of the current discourse – the question of whether Nigerians can ever benefit in any event of falling crude price, either now or in the future.

    Clearly, we find the debate misdirected. The reason is simple: with the current wholesale reliance on fuel imports, it should not be hard to appreciate why the landing cost of fuel would remain high to the extent that costs would depend on foreign currency movements, particularly the United States dollar. In the same way, it stands to reason that a country that imports nearly the whole of its fuel cannot devalue its currency by some 20 percent without expecting to suffer cost backlash. At nearly N180 to the United States dollar, for example, as against N160 a few months back, what it means is that the country would need more naira to import the same quantity of refined products. The pressure thus generated on the foreign exchange market translates to higher possibility of more losses in value for the national currency – a vicious cycle – a potentially loss-loss situation for the country and the people whether in the short or long run.  At this time, the debate ought to be how to get out of this vicious cycle.

    Lest we forget; the obverse side is that the government actually benefits from the devaluation – the direct result of more naira from crude sales; the same government that now seeks to deny citizens the benefit of cost reduction in oil.

    We continue to make the point that the greatest tragedy in all of this is the government’s pathetic response to the oil price slump. That the emerging fallouts from the oil price slump could not have been foreseen obviously beats imagination. And while much has been said about the current situation as providing the government a great opportunity to take another look at its policies in the sector, what we have seen thus far is the government limping on as if the problems would by themselves disappear without proactive steps taken by government to take them on.

    The solution, in our view, cannot be clearer today than it was 10 or 15 years ago: the nation needs new refineries to meet its domestic fuel requirements. That way, fuel pricing would not only be less subject to the vagaries of international currency fluctuations; it would also afford the nation immense opportunities to optimise earnings on the wasting asset.