The Nigerian Federal Government has reassured that it has no plans to sack workers as a result of the slump in the price of crude oil in the international market. Reacting to a Reuters report, “Nigeria slashes 2015 budget as oil price slump bites”, Coordinating Minister for the Economy and Minister of Finance, Dr. Okonjo-Iweala, also declared that capital expenditure as contained in this year’s budget had not been cut. The minister dismissed the Reuters report as being “full of inaccuracies.” She said in a statement issued this afternoon in Abuja by her Special Adviser Paul C Nwabuikwu:

“Our attention has been drawn to the Reuters report on the 2015 Federal Government budget in which it was claimed that ‘Nigeria has more than halved capital expenditure to less than 10 percent of 2015 spending.’ This is a complete misrepresentation of the facts. In response to a question by a Reuters reporter on why there seemed to be a decline in capital expenditure, the DG Budget had explained the reason within the context of proper sequencing of adjustment measures in an economy that has experienced a revenue shock of this scale. In arriving at the wrong figure of N387bn, the reporter had left out other components of capital expenditure.

“The Reuters story also makes the fundamental mistake of assuming that the oil benchmark price of $65 per barrel for Budget 2015 is cast in stone and would not be reviewed under any circumstance. This is of course not true as the Federal Government had on several occasions explained that it had adopted a scenario-based approach with accompanying adjustment measures, given the uncertainty as to where the oil price would eventually settle. In fact the Minister of Finance had gone on record as saying that the scenarios developed go as low as $45 per barrel.

“The implication of this is that we are prepared to introduce additional policies to ensure that capital expenditure and other critical spending heads were protected to the extent possible if, indeed, the oil price stayed lower than $65 per barrel. The focus is on critical infrastructure projects which drive growth in order to maximise impact.

“The claim in the story that the Finance Ministry said it will not change the benchmark price “…despite crude falling as low as $45 a barrel” is therefore totally inaccurate. The Ministry never, at any time, said it was wedded to $65 per barrel oil price. Quite the opposite. Otherwise, we wouldn’t have taken so much pain and effort to develop the many other scenarios indicated above.

“Also inaccurate is the statement ascribed to the DG Budget that ‘…it was easier to wield the axe on infrastructure projects than Nigeria’s notoriously bloated bureaucracy’. The government has no plan to sack workers.

“The report also ignores the fact that there is significant internal demand and consumption which is helping to drive growth in the Nigerian economy. A good example of this can be found in remittances from Nigerians abroad which the World Bank estimates at $21 billion per year.

Finally, the Reuters report also betrays an unfortunate political colouration and makes sweeping assumptions about the country’s political scene based on poorly understood information. This is neither professional nor balanced.”

•Photo shows Okonjo-Iweala.

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