The Federal Government has introduced some austerity measures and has reduced the crude oil benchmark for the 2015 budget in order to insulate the economy against the effect of falling crude oil prices.
The oil benchmark for the 2015 budget earlier fixed at $78 per barrel has been cut down to $73, as crude oil prices continue to drop on the international market. As far back as Thursday, last week, the price of OPEC basket of twelve crudes stood at $75.15 dollars a barrel, and there are indications the fall would continue this week.
The Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala told journalists in Abuja that the decision to cut revenue projection was part of measures designed to maintain economic stability, boost non-oil revenues further, plug loopholes and waste, as well as cut unnecessary expenditures in order to cope with the situation.
“As part of the response to falling oil prices, the Medium Term Expenditure Framework (MTEF) and the Budget 2015 proposal to the National Assembly have been revised. Government is now proposing a benchmark of $73 per barrel to the National Assembly compared to the earlier proposed benchmark of $78,” she said.
“Given the nature of the oil market, we needed to see the extent and trend of the oil price in order to take the right measures. Panic is not a strategy. It’s important that our strategies are based on facts and a clear understanding of both the strengths of the economy and the challenges posed by the drop in oil prices which is currently at $79 for our premium Bonny Light Crude.
“The drop in oil prices is a serious challenge which we must confront as a country. We must be prepared to make sacrifices where necessary. But we should also not forget that we retain some important advantages such as a broad economic base driven by the private sector and anchored on sound policies,” the minister said.
Here are some of the measures announced by Dr. Okonjo-Iweala:
– There would be no more foreign travels by civil servants, except where such travels can be defended as absolutely necessary.
– Foreign training programmes will be stopped with immediate effect, with all trainings done in-country, except where foreign sponsorship is secured for such trainings.
– Duplication among the functions of the Ministries, Departments and Agencies (MDAs) will be eliminated
– Private jets, yachts, Champagne and a list of other luxury goods will be aggressively taxed, as a way of creating an avenue for wealthy Nigerians to share their wealth with those at the lower level of the ladder.