TheCable

The Kaduna state government has adopted new measures to address looming economic crisis in the country.

The novel coronavirus across the world has led to a fall in the price of crude oil, Nigeria’s major source of revenue.

In a statement on Wednesday, Muyiwa Adekeye, special adviser to the governor on media and communication, said the state government has agreed to adopt measures to reduce the effect of falling oil prices on its economy.

Adekeye said the government took the decision after Nasir El-Rufai, governor of the state, received an interim report from the economic crisis response committee established on March 9.

He said the committee noted the falling price of crude oil amidst depressed demand for the commodity worldwide and the persisting global uncertainty as to how and when the coronavirus pandemic will be effectively contained.

“The report noted that should these unfavourable conditions persist, Nigeria may witness the worst economic crisis in its entire history. Therefore, it is a matter of urgency for a sub-national like Kaduna State to seriously consider and adopt measures to manage an extremely dangerous socio-economic situation,” the statement read.

“The meeting noted the risks to the state since revenues to a sub-national like Kaduna State consist basically of transfers from the Federation Account Allocation Committee (FAAC) and its own internally-generated revenue (IGR).

“With crude oil prices falling, FAAC will certainly shrink considerably in the near-term. Business slowdowns and the severity of the resulting economic contraction may significantly limit IGR as well.

“The scenarios reviewed indicated that Kaduna State’s gross annual revenues could fall by as much as N17bn if crude oil prices remain around $30 a barrel. The state’s annual revenues could fall by as much as N24bn in 2020 if crude prices fall to $20 per barrel. Either of these scenarios will imperil the discharge of obligations to personnel, pensioners and running of the government.

“The meeting decided that Kaduna State will prioritise its capital projects, especially in the health, education and infrastructure sectors, and uphold social safeguards like preserving the minimum monthly pension of N30,000.”

Specifically, the aide highlighted seven measures to be adopted by the state government.

He said the government will prioritise funding of capital projects; cut personnel costs and depress overheads including the imposition of an immediate embargo on foreign travel; use debit cards for residual overheads; and enhance payroll integrity.

Other measures include restriction of new employment; expansion of revenue base; and adoption of cost-cutting and revenue enhancement measures at the local governments level.

Meanwhile, the presidential economic advisory council had earlier warned that Nigeria would have to work hard to keep its head above the waters of economic troubles arising as a result of the coronavirus outbreak.