6th January, 2015
Jethro Ibileke/Benin
As the effects of the crash in crude oil prices in the international market continues to bite hard on the nation’s economy, Governor Adams Oshiomhole of Edo State says his administration will further renew its commitment to cut costs of governance and block leakages as part of measures to survive the expected drop in the revenue accruing to the state.
Oshiomhole who spoke on Tuesday in Benin, at the state’s first executive council meeting in year 2015, while noting that the year will be very difficult, however said the government will still sustain the progress made on the development of infrastructure, adding that, it is how the little resources available are managed that matters and not how much a state earns.
“I know we had to go through a very difficult period last year, there is no question that there is a huge gap between our revenue projections and actual receipts from the federation account arising from alleged oil theft but also a huge gap between our projected local revenue and what was actually realized.
“With the sustained general reforms, we have decided that some of the gains of this government are consolidated. It is very clear we are going to face very serious challenges this year. As at the time we passed our budget, it was based on about $78 per barrel and the Federal Government which acted later have had to review their figure downwards twice and at the last count have chosen to adopt $65 per barrel.
“It is not clear whether this unstable market price is going to continue on a downward trend or whether we have seen the worst of it or whether we are likely to experience a marginal increase in price but what is obvious is that this year’s revenue will be far less than expected and for me, it is not to overstress the issue whether the volume of oil theft is avoidable or unavoidable.
“Whether we know the thief or we do not know the thief, whatever is the case, the receipt from the federation account is likely to suffer a huge fall. There is nothing anyone can do about that. It is beyond our control,” he said.
To survive the tough time ahead, the governor said the government will renew its commitment to cut costs and block all leakages, including those in the tax collection chain, are blocked as much as possible and ensure that all taxes that were collected were actually reflected in the revenue of government.
“Also, we are going to sustain the progress made in other areas where we have made improvements. So, it’s going to be a tough year, but as they say, tough times don’t last, but tough people do.”
Governor Oshiomhole added, “However, I recognize that people who pay taxes and tax itself is a function of the economy. When the economy is doing well, people are making money, businesses are thriving, then you can expect to pay tax but when you have the kind of vicious cycle that we seem to be facing, where a good section, even the public sector, there are indications that some might even downsize and when purchasing power drops, obviously, private concerns that are involved in production and distribution of goods and services are also likely to reduce their patronage.
“The good news however is that whereas there are a number of federal agencies that were not able to pay December salaries and many state governments at least up to twelve state governments were not able to pay December salaries, and many are in arrears of salaries for up to three months or four months, but I’m happy that in Edo State, we were able to pay salaries to all in our payroll, including teachers, civil servants and so on. The point therefore is not about how much we earn but how we manage our available resources.”
While expressing appreciation to members of the State Executive Council for all the sacrifices made in the year 2014, Governor Oshiomhole called on them to put on their thinking caps in order to surmount the hurdles of the year 2015 which, according to him, will be “a very challenging year”.