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Austerity: 30 per cent pay slash for Jonathan, ministers, others


President Goodluck Jonathan

President Goodluck Jonathan

IN a display of leadership-by-example in these belt-tightening times brought about by the slump in crude oil price at the international market, President Goodluck Ebele Jonathan has ordered a 30 per cent pay cut for all political appointees in the Executive arm of government including himself and the Vice President.

But 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.

The source who asked not to be named, however, confirmed that the Commission was in receipt of a request from President Jonathan on the matter but said the request may not sail through because it does not for now see the need for the pay cut, pointing out that a similar development played out around 2009 and 2010 when the late President Umaru Yar’Adua made the request of pay cutin the face of falling oil prices.

With crude oil mineral resources constituting more than 80 per cent of Nigeria’s revenue stream, the country’s liquidity condition has, expectedly, been jolted since the third quarter of last year when prices at the international market headed downwards until recently when it began a gradual recovery.

The slide downwards has made it very difficult for the funding of the capital components of the 2014 fiscal plan as envisioned. Consequent upon this, the current fiscal plan still with the National Assembly presents a very tight and austere budget with some of ministries, departments and agencies (MDAs) getting zero allocations for capital expenditure, the scrapping of certain redundancies within the public service and introduction of alternative areas of revenue generation to make up for the more than 50 per cent drop in revenue from the petroleum sector.

Now, in addition to those unveiled earlier by the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala when she presented the 2015 spending plan on December 17 last year, which include the introduction of taxes on luxury items and first class and business class air travel taxes, Jonathan has directed a 30 per cent pay cut for all political appointees in the Executive arm as part of sacrifice to free up revenue for funding of the yet to be passed plan.

The Director -General of the Budget Office of the Federation, Dr. Bright Okogu, who revealed this at the weekend when he spoke to The Guardian exclusively in Abuja, said the directive takes immediate effect. All classes of political appointees including Permanent Secretaries and Heads of Federal Government agencies are affected by the pay cut order.

His words: “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. 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.

“Beyond this pay cut, you can also look at the expenditure side and see pruning measures such as some of the things the people do on a yearly basis to decorate offices. We are encouraging government officials to delay such things like getting new office buildings or such things. We are going to focus on things that are really important for recurrent spending.

‘‘And the final point I wish to make relates to the Oransaye Report which you may have heard of. The Federal Government initiated this and has gone through the whole process. The report has been submitted, the White Paper is out but what has happened is that some merging entities may lead to loss of jobs.
‘‘The aim here is to streamline the activities of these agencies and save government some money and then fund the ones that are left, better. If necessary, you can deploy such staff to other areas of government where they are needed, so you are not laying people off.

‘‘The President has told us severally, that the ideas he has are not to deny people their jobs. He knows that every single person that is working and earning salary is taking care of other five, six extra people in the immediate and extended families. So this is not a matter of saying you want to throw people out of jobs.
This is very clear, when it comes to job protection and creation. The President is very concerned and he supports us 100 per cent in some of the policies we have developed as a team over the years.”

The Director- General also gave an insight into the Medium-Term Expenditure Framework (MTEF) and fiscal plan still with the National Assembly as well as how the plan is fashioned to protect the vulnerable and ordinary Nigerians from the pangs austerity.

“We have an oil production level which has fallen from last year and the years before. We are hoping that the actual production that comes in will match what I have just described. We have chosen a benchmark price currently lower than the market price at about 52 or 53 dollars per barrel. Whatever it turns out to be, we have initiated a lot of measures including some of the ones you have heard of.

“Number one, some of the entities that were enjoying tax exemption status, such as in the oil and gas sector, are now going to pay. They were making profit before. The forbearance given to them was to the point and we should be able to get revenue from that. This is an innovation. You also have the tax on luxury items. But when it comes to things to protect the lower income class, the President told us not extend the tax.

This is a demonstration of the President’s concern, those are some of things he has been passionate about, that is trying to protect the lower class. Like I mentioned, the Federal Inland Revenue Service will bring in more non-oil revenue and we are hoping that down the road, some conversation about Value Added Tax (VAT) can be concluded.

‘‘The Federal Government gets 14 per cent only and the states where more VAT is generated get 85 per cent. One per cent goes to FCT, so the Federal Government is pushing this to help the state governments and they also have interest to see the VAT rate move down the road. We are not saying we are going to do it today, because the atmosphere is not ripe now but we are talking and preparing everybody’s mind and consulting to see what Nigerians think about it.

“Then look at the expenditure side, just to round up, because you have the revenue side and the expenditure side. The government has initiated and introduced a circular with respect to training being done in Nigeria. There is no reason why if Ministry of Finance or any body wishes to train staff, such staff must go to Ghana or Dubai or anywhere else.

‘‘We’ve always said that this is not the best way to go.
We have beautiful places here in Nigeria like Tinapa or Lagos or even here in Abuja. Several other areas around the country can be good for trainings. But this year it’s actually being put into action,” Okogu further revealed.

But according to the RMFAC source: “The remuneration package for political, public and judicial office holders in use now remains the February 2009 to June 2009 approved package because the last time the late President Umaru Yar’Adua attempted to revised it suffered a setback because the commission which role is to among other things fix political office holders’ package didn’t see the need based on economic realities then. You know it was during the same oil price fall. So the package has not changed.

“Yes, President Goodluck Jonathan has actually made the same request. But unfortunately, the commission has still turned it down because there is no merit in the move.
I can tell you he has no right to temper with the salary of any political office holder.

“However, the President in his own capacity can say he would not receive a part of his salary or all of it, saying he is donating it for charity or related cause but he can not order his or any other person’s pay as approved by the Revenue Mobilization Allocation and Fiscal Commission,” our source insisted.

Under the sustaining pay package for political office holders, annual take home pay is N14.058 million which translates to a month pay of N1.171 million. The Vice President takes home annually the sum of N12.126 million broken down to N1.010 million every month. For senior ministers, the Secretary to the Government of the Federation (SGF) and chairmen of constitutional bodies, their annual package is N7.801 million with a monthly value of N650,136.65 kobo while ministers of state and members of constitutional bodies take an annual package of N7.536 million which gives them a monthly pay of N628,056.91 kobo.

For the categories of special advisers, which included others like speech writers, their yearly pay is N7.09 million and per month, N590.957.81 kobo.

For the Auditor General of the Federation, the Accountant -General of the Federation; executive secretaries; chief executives of parastatals and INEC Resident Electoral commissioners, their annual package is N7.414 million which translate to a monthly pay of N617, 881.68 kobo.
The package is exclusive of some other emoluments which are annually or monetised entitlements.

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  • Enny

    What is the problem with this RMFAC, president said they should cut his and his ministers salary they refuse, I don’t understand, so does this mean there can only be upward review of salary but such can’t be changed according to the country economic situation

  • francis john

    I am not a fan of Jonathan or his government but I think RMFAC are right because each and every one of them deserve their basic salaries. That is not the area the president should effect changes. The money they are stealing everyday through Crude oil theft is more than all the monthly salaries of the executive put together. There bonuses, allowances and security vote exceeds their salaries.

  • truthisreallybitter

    The truth is that most Nigerians are neither patriotic nor sincere. The fact on ground is that 50% of oil revenue is not available and we want to pretend it would not affect us anyway? I am even thinking that more measures should be announced and ways of cushioning the effect also announced, only that we are in an election year and the presidency is being cautious. Beyond this however, the government should fast track every effort to diversify the economy so that it is not weakened at anytime by future fluctuations.

  • grelia one

    As good and patriotic as this move is, more is needed. The entire system needs a surgical change, and only a fiscal restructuring can do it. We can no longer afford dedicating over 70% of our budget to recurrent expenditure at the expense of manpower, infrastructure, etc. development upon which any economy depends. We deceive ourselves by expecting that we can get our of this mess through belt-tightening measures, which will only scratch the surface at best. Shagari’s austerity measures and IBB’s structural adjustment program did not stem our backward drift. We need to restructure, and that’s why these elections are more about our future than about Jonathan and Buhari. They only matter because of their differences on the issue. We will use Jonathan to restructure while Buhari will not give us the opportunity.


    The greatest deceit ever , is of no important to nigerian you have milked treasury dry already

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  • Naija Poet

    Another political gimmick coming on the 11th hour of the election!

  • emmanuel kalu

    this is a good first step and if the commission( which i find crazy for them to say this is not the right time) refuses to implement, the president should take it to the public and he could act in other ways. if they don’t agree to cut the salaries, then reduce the amount of appointments by 30%. there is a lot of waste in the govt, from operational equipment to staffing. there is absolutely nothing that is needed by the govt that can’t be produced in nigeria. no govt staff should leave the country for any kind of training. bring the trainer to the country if you can’t find someone locally to do the training

  • TOO LITTLE, TOO LATE. Return all our monies that you looted and still loot.

  • kenneth uregbulem

    This is an election gimmick…..decrease your pay cheque when the elections are on and increase it after the elections are over. hahahahahahah. Goodluck Jonathan your time is up.We are all aware of your incompetence and the smell of your kleptocracy has reached the high heavens.

    • Shola

      spare jonathan from this, what change are you talking about? Doctors demanding for their rights and you are mentioning jona you no get shame

  • Layi Niyi

    salary no be the main thing right from generation na allowance you must cut.

  • Sunny0099

    1. The Chibok Girls
    3. Police pension fund
    4. Missing $20Billion
    5. $9million Arms deal Embarrassment in SA
    6. EKITIGATE Election fraud
    7. Immigration job SCAM (He is just meeting the victims and dolling out money )
    8.DEPLETING External Reserves.
    9. Devaluation of Naira to N250 to a $
    10. Oil theft Increase
    11. REWARDING THIEVES with NATIONAL honours and appointments
    14. Skyrocketed ELECTRICITY Bills
    17. National Assembly INVASION by Police
    19. Stella Oduah Aviation Scam
    20. Kerosene subsidy
    21. Last minute fighting of Insurgency
    22. Sentencing soldiers to death for asking for weapons to fight
    23. Directly supporting and paying 10million USD as salary to terorist Asari and Terrorist Tompolo amongst others
    Palling around with boko haram chieftains in Niger and Dafty’s
    inability to capture, extract information and bring to justice a singe
    captured boko haram fighter up till today
    25. Mrs Dafty’s personal terrorist bombing campaigns in Rivers state (Stoning the opposition)
    Dafty’s work for the benefits of enemies of Nigeria – Handpicking
    Abacha’s son as PDP candidate for Kano, stoppng FaniKayode,treasury
    looting case and appointing him in his campaign, supporter of Anenih,
    IBB, and other treasury looters who should be in jail
    27. Conversion
    of MOPOL to Meiguard of the rich while the poor wallow in abject
    insecurity; and using regular police, eg. Mbu, as political thugs!
    Postponing elections by refusing to provide security when in fact,
    elections will last for only one day, and the entire armed forces and
    police in Nigeria could have been deployed to secure just that 10hrs of
    the election day.
    29. Sending troops to look for Sambisa forest in Tinubu’s Ikoyi house
    30. Giving AIT 10billion to air false and negative videos on APC.
    33. FAILURE TO PUBLICLY DECLARE his ASSETS saying “I don’t give a damn”

    • Shola

      You are APC

      • Sunny0099

        I am a Nigerian….but you are free to call me whatever you want.

    • Shola

      You may not get a humble president like Goodluck again. These issues you raised are Nigerians problem that must be collectively dealt with, they are moral issues that must be dealt with from the home, school, churches and mosques. forget about sentiment and face the reality.. we are in democracy, if you have facts of what you have raise then go to court and get jucetice.

      • Sunny0099

        The Nigerian people will decide on March 28th either Jonathan is culpable or not . That is what elections are for…. No need to go to court. Tell Jonathan to allow Nigerians to freely express their judgement on these issues on that date.

        • Magaskiya

          We don’t need a humble (read timid and insecure) president. We need an effective president. One who has integrity, tackles the everyday needs of a regular Nigerian (e.g electricity), leads from the front and by example and is not willing to dine with the devil just to win a second term

  • Babalakin

    CHEAP MOVES. All the pay cut amounts to how much or what percentage of the budget? It is like the administration is out of ideas or they are afraid of blocking the real waste and drains in our national finances. Dear President, the move amounts to zero.

  • BugOrVirus

    it is ignorant to classify Perm Secs as political office holders. They are civil servants, and cannot be affected by this directive. I’m sure the DG of the Budget Office of the Federation should be aware of this.

  • Perrymarvis2014

    These crooks can not stop amusing us. What is 30% to the voulme of corruption that goes on in NNPC, Aviation, police, Immigration, Customs, Navy, Oil wells, Defence budget that is not excuted, and many other sectors too many to be mentioned? Guardian should please serve us with better stories, we already know the truth. Even if they like let them shade 100% of their salaries, it is immaterial and will not stop them from loosing election.

  • Yomi Ade

    30% salary reduction; what of under the table salary ? (Bribes) Please dont deceive Nigerians. Enough is Enough !!!!!!