Edo will cut costs to survive 2015 –Oshiomhole

Posted by admin Edo, Headlines, State News Wednesday, January 7th, 2015

Governor Adams Oshiomhole of Edo State has said the government will 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 as a result of the crash in the price of crude oil.

Speaking yesterday at the state’s first executive council meeting this year, the governor said though 2015 would be very difficult, the government would still sustain the progress made on the development of infrastructure, saying it was how the little resources available were managed that mattered and not how much a state earned.

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.

“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, reviewed its figure downwards twice and at the last count, has chosen to adopt $65 per barrel.

“It is not clear whether this unstable market price is 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? 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 said: “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 is 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.”

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