As part of measures to plug leakages in the federal civil service and reduce overhead, government is considering staff reduction across the Ministries Departments and Agencies (MDAs).
Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed dropped the hint in Abuja, yesterday, while fielding questions from stakeholders during a public presentation of the 2022 federal government’s budget proposal.
On ways the government plans to reduce rising overheads and personnel cost across MDAs, Ahmed said that a committee was working on the proposal.
She observed that reducing the size of government has become necessary in view of the bloated size of the recurrent expenditure annually.
Emphatically, she said, staff of the federal government will lose their jobs when government merges their agencies with others.
According to her, the mode of reducing the workforce will not entirely align with the Stephen Oronsanya’s report but would be based on the committee’s recommendation.
Already, government, she said, is working on an “exit package” to be paid to those that will be affected.
“There is a special committee led by the SGF that is working on the review of agencies with a view to collapsing them partly using the Oransanya report. At the end of it what we want to do is to reduce the size of government and also to reduce the size of personnel cost and part of it will be designing the exit packages that are realistic”.
“We are revenue challenged. So, everything we do we can’t put an exit package if you are not willing to cash it immediately. So, when you are asking people to exit by choice you must be able to give them that package as they’re exiting.
“There are so many things that are happening. These are not easy decisions to make because they affect people and families. So, you have to make sure that whatever we commit to we are actually going to deliver on it” she said.
She noted that President Muhammadu Buhari on December 31, 2021 signed N17.1 trillion 2022 budget despite what he called worrisome changes (insertion of about 6,000 new projects) effected in the budget by the National Assembly.
The minister said 2022 Budget seeks to continue the reflationary policies of the 2020 and 2021 budgets, which helped put the economy back on the path of
recovery and growth.
“The 2022 Budget was prepared taking into consideration the
policies/strategies contained in the 2022–2024 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP). The Budget was prepared using the Zero-Based Budgeting (ZBB) approach and in line with the government’s development priorities, as articulated in
the National Development Plan (NDP) 2021-2025. Allocations to Ministries, Departments and Agencies (MDAs) were guided
by the core objectives of the NDP 2021 – 25”, she said.
Giving an overview of federal government’s aggravated expenditure which is (inclusive of government-owned enterprises (GOEs) and project-tied loans)
projected at N17.13 trillion, she said that the figure is 18 per cent higher than the 2021 Budget .
It has recurrent (non-debt) spending of N6.91trillon, which is 40 per cent of total expenditure and 20 per cent higher than the 2021 Budget. It has aggregate capital expenditure of N5.96trillion , refecting 35 per cent of total expenditure.
The provision is inclusive of capital component of statutory transfers, GOEs Capital and Project-tied loans expenditures.
At N3.61trillion, debt service is 21% of total expenditure, and 34% of total revenues. There is provision to retire maturing bonds to local contractors / suppliers of N270.71 billion is 1.6% of total expenditure.
“This provision is in line with the FGN’s commitment to
offset accumulated arrears of contractual obligations dating back over a decade.
“2022 Budget has overall budget deficit of N6.39 trillion. This represents 3.46% of GDP. Budget deficit is to be financed mainly by borrowings: domestic sources: N2.57 trillion, foreign sources N2.57 trillion;
multi-lateral /bi-lateral loan drawdown, N1.16 trillion and privatisation proceeds N90.7 billion.
Ahmed justified government’s borrowing which she was necessitated by the revenue challenges adding that the borrowings were within the threshold limit.
“This is to restate that the debt level of the Federal Government is still within sustainable limits. Borrowings are essentially for capital expenditure and human
development, as specified in Section 41(1)a of the Fiscal Responsibility Act 2007.
Having witnessed two economic recessions we have had to spend our way out of recession, which contributed significantly to the growth in the public debt. It is unlikely that our recovery from each of the two recessions would have been as fast without the sustained government expenditure funded partly by debt”, she said.
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