Okonjo-Iweala: No plans to slash 2015 budget

The ministry of finance has dismissed a Reuters report claiming that the capital expenditure in the 2015 budget has been slashed, following the slump in global oil price.

In the story, the news agency also said the federal government was adamant about changing the $65 per barrel oil benchmark in spite of the steady plunge of oil price.

But reacting on Thursday, Ngozi Okonjo-Iweala, the minster of finance and coordinating minister of the economy, described the report as full of inaccuracies.

“Our attention has been drawn to the Reuters report on the 2015 federal government budget, in which it was claimed that ‘Nigeria has more than halved capital expenditure to less than 10 percent of 2015 spending.’ This is a complete misrepresentation of the facts,” Paul Nwabuikwu, special adviser to the minister, wrote in a statement.

“In response to a question by a Reuters reporter on why there seemed to be a decline in capital expenditure, the DG Budget had explained the reason within the context of proper sequencing of adjustment measures in an economy that has experienced a revenue shock of this scale. In arriving at the wrong figure of N387bn, the reporter had left out other components of capital expenditure.

“The Reuters story also makes the fundamental mistake of assuming that the oil benchmark price of $65 per barrel for Budget 2015 is cast in stone and would not be reviewed under any circumstance. This is of course not true as the federal government had on several occasions explained that it had adopted a scenario-based approach with accompanying adjustment measures, given the uncertainty as to where the oil price would eventually settle. In fact the minister of finance had gone on record as saying that the scenarios developed go as low as $45 per barrel.”

Okonjo-Iweala clrified that the implication of this is that the country would to introduce additional policies to ensure that capital expenditure and other critical spending heads were protected to the extent possible if, indeed, the oil price stayed lower than $65 per barrel. She added that the focus was on critical infrastructure projects which drive growth in order to maximise impact.

“The claim in the story that the finance ministry said it will not change the benchmark price ‘…despite crude falling as low as $45 a barrel’ is therefore totally inaccurate. The ministry never, at any time, said it was wedded to $65 per barrel oil price. Quite the opposite. Otherwise, we wouldn’t have taken so much pain and effort to develop the many other scenarios indicated above.

“Also inaccurate is the statement ascribed to the DG Budget that ‘…it was easier to wield the axe on infrastructure projects than Nigeria’s notoriously bloated bureaucracy.’ The government has no plan to sack workers.

“The report also ignores the fact that there is significant internal demand and consumption, which is helping to drive growth in the Nigerian economy. A good example of this can be found in remittances from Nigerians abroad which the World Bank estimates at $21 billion per year.

“Finally, the Reuters report also betrays an unfortunate political coloration and makes sweeping assumptions about the country’s political scene based on poorly understood information. This is neither professional nor balanced.”

This is the second time in 24 hours that Nigerian officials would be debunking a Reuters story.

On Wednesday, the agency quoted Amina Zakari, an INEC national commissioner, as saying on the sidelines of a news conference that the presidential election could be delayed if the number of permanent voter cards distributed by February 8 is too low.

But Kayode Idowu, chief press secretary to the INEC chairman, disowned the story, saying Zakari did not make such statements either during the conference or on its sidelines.

“I write to refute your story in Reuters attributing national commissioner of the Independent National Electoral Commission (INEC), Amina Zakari, as saying that the 2015 general elections may be delayed if the number of Permanent Voter Cards collected by voters is too low…” Idowu wrote in a mail to the American news agency.

“The inference you’ve made for the schedule of elections is entirely yours, and misrepresents the conversation that took place at the event this morning. You will do well to correct the report urgently, please.”