The Minister of Finance, Budget and National Planning, Zainab Ahmed, has allayed the fears of workers, insisting that there is no plan by the Federal Government to lay off government workers.
Ahmed said this on NTA’s ‘Good Morning Nigeria’ programme on Thursday.
The minister denied claims that the government was planning on sacking workers in order to save funds.
According to her, President Muhammadu Buhari had said repeatedly that no worker would be sacked. The minister, however, said the government would encourage people to leave government jobs by giving them incentives.
Ahmed said the government would reduce overheads by ensuring that government agencies are merged.
She added, “Mr President doesn’t want to disengage staff. That is what he has directed from the beginning of his administration. He also directed that we pay salaries. The Federal Government has never failed in paying salaries and he said we must always pay pensions.
“So, he has been consistent in those directives and we have followed those directives to the letter.”
When asked how the government would cut personnel costs, Ahmed said, “Well, we do hope that at the end of the exercise, some agencies will be merged and it will cut down operational costs.
“And also we will be able to come up with incentive packages to retrain people and redeploy them in some areas where they are useful. For example, we still have a very high need for teachers so we can retrain people and send them to teach but also incentive packages to exit. Again, that is also money. If you want people to exit you have to pay them.
“That is an incentive package so that they can go. That is why it is taking a lot of time because it is not easy to decide on this. Everything centres on resources. We need resources and if we had a lot of money, we would just give very beautiful incentive packages and people would exit and go and start their businesses and we would reduce the size of the personnel cost.”
Barely two years after VAT increase to 7.5 per cent, FG mulls further hike
The Minister also said the Federal Government has plans to increase the rate of Value Added Tax paid by Nigerians.
The move came barely two years after the government increased VAT from five per cent to 7.5 per cent.
Ahmed, who was speaking on measures being adopted by the government to shore up revenue, said that there was a need for the government to generate more tax revenue.
She added that at 7.5 per cent, Nigeria has the lowest VAT rate in the African region.
Ahmed said, “7.5 per cent VAT is the lowest in Africa, and it is about 50 per cent of the sub-Saharan African average which is about 15 per cent, so we are still very low.
“Yes we have to increase VAT at sometime going forward, we can’t stay at 7.5 per cent when we want to increase our revenue.
“At some point, I am not saying this year, because we didn’t make provision this year.”
She explained that the government didn’t make provisions for the increase in the Finance Act 2021 because of the contentions between the Federal Government and state governments on VAT.
“So we must stay clear until things are settled,” she added.
