President Jonathan Orders 30% Salary Cut for Nigerian Government Officials

March 17, 2015

Pressed by oil price fall in the last year, Nigeria has sought out extensive austerity measures to curb the adverse effects of lower oil revenues in the coming years by hiking taxes and cutting spend. The latest of these austerity moves, however, is targeted at slashing the spend of the ruling elite, as President Goodluck Jonathan orders a 30 percent cut to government officials’ welfare packages.

The cut will affect the President himself, his ministerial appointees, and head of government agencies and parastatals. “Political office holders’ salaries are being cut by between 20-30 per cent, ranging from permanent secretaries, directors’ general and so on all the way to ministers,” said Dr. Bright Okogu, who spoke to The Guardian newspaper over the weekend. “This, however, does not amount to very much, but the purpose is to show the commitment of this administration that if they want to make adjustment, they want to do it and lead by.”

The successful implementation, however, might be stalled by ‘due process’. “there is a new twist over the pay cut initiative by the President yesterday as a dependable source at the Revenue Mobilisation, Allocation and Fiscal Commission (RMFAC) told The Guardian that the President lacks the power to implement a pay cut unilaterally without the Commission’s approval,” read The Guardian report.

Former Nigerian president, the late Umaru Musa Y’Ardua, had previously attempted to ply such route in the face of a similar oil crisis just after assuming leadership in 2007. His strides were delayed by bureaucratic protocols, and eventually never materialised.

Nigeria’s fate as an economic table-topper had been put in jeopardy over the last year as its cash cow, oil, has lost more than 50 percent in price value, falling to an all-time low of $43 per barrel in January, 2015. Though it has longed picked up momentum to stabilize around $55 a barrel in recent weeks. This has put a strain on the country’s revenue inflow, forcing the government to twice review its budget benchmark, which is hinged on the global price of oil, downwards.

Its Finance Ministry, headed by renowned economist, Dr Ngozi Okonjo-Iweala, had hinted in February that Nigerians may be required to pay more in taxes, as effect of oil price fall hit hard. Odilim Enweagabra, a Nigerian development economist and social commentator, has even canvassed the need to return to the era of tolled highways in a bid to soften the burden on the government.

Locals though will feel much more willing to accept a tougher policies going forward should they perceive the government as willing to share in a similar plight.

Source: Ventures Africa

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