By Alltimepost.com.
Governor Adams Oshiomhole of Edo State has said that his government will further renew its commitment to cut costs and block leakages as part of measures to survive the expected drop in the revenue accruing to the state due to crash in the price of crude oil.
At the state’s first Executive Council Meeting of this year, the Governor said 2015 would be very difficult, but that government would still sustain the progress made on the development of infrastructure, saying, “ it is how the little resources available are managed that matters and not how much a state earns.”
He said: “I know we had to go through a very difficult period last year, 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.”
Oshiomhole said, “With the sustained general reforms, we have decided that some of the gains of this government are consolidated.
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.”
The Governor said it was not clear whether the unstable market price was 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.”
“Whether we know the thief or we do not know the thief, whatever is the case, the receipt from the federation account is likely to suffer a huge fall. There is nothing anyone can do about that. It is beyond our control,” he said.
To survive the tough year, Oshiomhole posited: “we are going to renew our commitment to cut costs and block leakages as much as possible and ensure that all taxes that are collected are actually reflected in the revenue of government. We will ensure that all leakages in the tax collection chain are blocked.”
“Also, we are going to sustain the progress made in other areas where we have made improvements. So, it’s going to be a tough year, but as they say, tough times don’t last, but tough people do.”
Governor Oshiomhole added, “However, 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 good news however, according to him 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 were not able to pay December salaries, and many are in arrears of salaries for up to three or four months, Edo State was able to pay salaries to all its workers, including teachers, civil servants and so on.
“The point therefore is not about how much we earn but how we manage our available resources.”
He thanked members of the State Executive Council for all the sacrifices made in 2014 and urged them to put on their thinking caps in order to surmount the hurdles of 2015 which, according to him, will be “a very challenging year”.
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