Falling Oil Prices: Edo To Cut Cost Of Governance.

From Jefferson Ibiwale, Benin   

Edo State is to adopt more prudent management of its resources by cutting down on the cost of governance and blocking avenues of leakages and wastages as a measure of surviving the downturn in the economy arising from falling international oil prices.

The Edo State governor, Adams Oshiomhole, who stated this in Benin on Tuesday at the first meeting of the state executive council meeting this year , observed that the falling price of crude oil will impact on the revenue accruing to the state from the Federation Account but assured that his administration will manage it scarce resources prudently so that it can sustain the development of infrastructure and social serves.

The governor said that what really matter it is how the little resources available to the state is managed and not how much it earns.

Oshiomole said that the resources accruing to the state through internally generated revenue and federal allocation had fallen, partly due to crude oil theft, and warned that there would be challenges ahead.

“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,” he stated.

He said further: “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.”

Governor Oshiomole said his administration would continue to take steps to tighten control on government spending while blocking avenues of leakages and also ensuring strict monitoring the system of internally generated, particularly taxes. He stated that there would be stricter control on tax administration to ensure that all taxes, levies and duties collected on behalf of government are remitted into government coffers.

Even then, Oshiomole noted that the economic downturn would affect the revenue from taxes.



    “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 governor credited his government for being able to meet its financial obligations in spite of revenue shortfalls, noting that the federal government and some state governments have fallen back on the payment of staff salaries.

    “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.”

    Governor Oshiomole thanked members of the state executive council for their commitment to work in the past but called on them to put in more effort and think creatively to enable the state survive the anticipated challenges of 2015.


    Join the ICIR WhatsApp channel for in-depth reports on the economy, politics and governance, and investigative reports.

    Support the ICIR

    We invite you to support us to continue the work we do.

    Your support will strengthen journalism in Nigeria and help sustain our democracy.

    If you or someone you know has a lead, tip or personal experience about this report, our WhatsApp line is open and confidential for a conversation


    Please enter your comment!
    Please enter your name here

    Support the ICIR

    We need your support to produce excellent journalism at all times.

    - Advertisement


    - Advertisement