The Federal Government will prepare a supplementary budget to take care of workers’ demand for an increase in salaries when the new minimum wage proposal, which is currently being worked on, is eventually approved.
The Director-General, Budget Office of the Federation, Ben Akabueze, said this on Wednesday in Abuja during a dialogue with Civil Society Organisations on the 2018 budget.
He stated that the fact that there was no provision yet in the 2018 budget proposal currently before the National Assembly to cater for the planned increase did not, in any way, suggest that the Government was not willing to increase the workers’ salaries.
The Nigeria Labour Congress has made a proposal for N56,000 for the least paid worker to the Federal Government’s committee on the minimum wage.
The 30-member committee headed by a former Head of Service of the Federation, Ms. Ama Pepple, was inaugurated in November last year by President Muhammadu Buhari
Akabueze said that when an agreement had been reached on the new minimum wage, the financial implications would be worked out and a supplementary budget would be prepared for its implementation.
“Right now, however, the only provision that exists is what we call public service wage adjustment and that’s merely over N40bn that has been made on that line, which means it will be enough to cater for any adjustments that may be necessary.”
Akabueze also faulted claims in some quarters that the 2018 budget was filled with unclear expenditure, adding that the fiscal document was carefully crafted in line with the objectives of the Economic Recovery and Growth Plan.
He said, “Issues were raised on some provisions in the budget, including provision to offset part of contractor liabilities of N10bn by the Federal Ministry of Power, Works and Housing for settlement of liabilities.
“Clearly, the Government has to make provisions to offset these contractor liabilities going back several years.”
On the issue of low revenue remittances into the Consolidated Revenue Fund Account by independent revenue generating Agencies of Government, the DG said a new framework to monitor revenue remittances is being worked out.
He wondered why the Agencies could not meet their targets despite the fact that the Government had spent over N40Tn in the past to finance their operations.
Akabueze added, “Many Agencies that generate revenue do not remit to the CRF; this is one area we are focusing on as we go forward.
“We are working to design a new performance management framework for Ministries, Departments and Agencies that will see them contribute to the CRF.”
When asked why the Government did not reduce the revenue target since it had been described as over-reliance, he said, “We have refused to take the path of reducing the revenue projection from the agencies. You will look at, for instance in the 2016 budget, we projected a very ambitious N1.5Tn for these Agencies and by the time the year was over, we recorded about N400bn.
“In 2017, we took a hard look and reduced the projection to N847bn. The full year fiscal figures are not out yet, but I know that there is significant underperformance on that; N847bn from these Agencies isn’t too ambitious in which cumulatively, the Government has invested over N40Tn over the years and therefore a budget of N847bn is simply asking for a two per cent return on investment.
“That is not unreasonable. So, rather than take the approach of lowering the target just because they haven’t met it, we have chosen to hold fire on the target and to engage with these Agencies to drive performance and say this is not acceptable.”
He stated that despite the fact that the Government could not return to a predictable budget calendar this year, more efforts would be made to return the country to the January to December budget cycle in 2019.
On issue of personnel cost, which is about 30 per cent of the 2018 budget, Akabueze explained that the decision of the Government not to sack workers during the period of economic recession made it difficult to reduce the wage bill.