Why FG Is Afraid Of Signing Any Deal With ASUU
…Nigeria is not going to IMF for Bail Out- Akabuze
The Federal Government yesterday explained why it is afraid of signing any agreement with the Academic Staff Union of Universities (ASUU) and putting an end to the crisis rocking the Federal Universities.
From all indications the strike may linger for more months before it would be called off.
The Minister of Education and the Director General, Budget Office of the Federation (BoF), Adamu Adamu and Ben Akabueze at different fora stated that the federal does not want to enter any agreement that it cannot implement because of the paucity of funds.
Adamu Adamu stated this in Abuja during a meeting of Pro-Chancellors and Vice Chancellors of Federal Universities, held at the National Universities Commission (NUC) on Tuesday.
Ben Akabuze, in his reaction on Arise Television gave the same reason why the Federal Government would not enter into any agreement with ASUU.
Adamu said President Muhammadu Buhari warned the government team involved in the negotiation with ASUU against signing an agreement that government would not be able to fulfill.
But Adamu said the federal government could only afford a “23.5 percent salary increase for all categories of the workforce in federal universities, except for the professorial cadre which will enjoy a 35 percent upward review.”
He, however, stated that N150 billion would be provided for in next year’s budget for the refurbishment of federal universities, with another N50 billion for the payment of outstanding academic staff allowances.
The minister said the meeting of the heads of universities, convened at the instance of NUC, became “necessary and urgent due to certain misconceptions and misinformation in the public domain, regarding the ongoing strike action by ASUU.”
The Director General, Budget Office of the Federation (BoF), who was asked about the ASUU strike and what could be responsible for the government not making available the necessary fund required by the union, said, the revenue projects of the government is dwindling and it would be difficult for the government tp take up additional responsibility which it might not be able to fulfill.
He also spoke about the suspended 5 percent telecom tax, which has been suspended. He however stated the suspension has not been communicated to them at the Ministry of Finance.
The director general expressed concerns about the suspension saying that the country may have to rework Medium Term Expenditure Framework (MTEF).
“This action would negatively impact government financial projections for next year’s budget if it is true because tax had already been captured in the Finance Act 2020, any move to postpone its implementation would lead to distorting the 2023-2025 funding plan ”
He said he did not know about the suspension. “This is law now. So, beyond what I have read in the media, we haven’t been advised in terms of the suspension. For instance, recently the Federal Executive Council (FEC) passed the MTEF for 2023-2025.”
According to him, the MTEF document had already gone through a long process before its official endorsement, arguing that tampering with it would only negatively impact the government’s future plan.
“The framework that the FEC passed includes projections for this tax. That framework is currently before the National Assembly. Over the last two weeks we have been holding meetings with agencies of government on this.
“ If we are formally advised that this is no more applicable, then we will have to rework that Medium Term Expenditure Framework.
“What that means is that the projected revenues will decline and the deficit will increase, which means that we either have to cut back on expenditure or increase debt,” he argued.
The MTEF proposal has a total of N19.76 trillion, with a proposed deficit of N12.42 trillion. “We face critical fiscal challenges which we need to address, he said.
The Minister of Communication and Digital Economy, Isa Pantami had announced the suspension of the telecoms tax implementation, stressing that its execution could lead to heavy negative impact on the struggling sector.
But Akabueze insisted that the companies operating in Nigeria were not overtaxed, drawing a parallel between Nigeria and 21 other African countries, which he said pay higher taxes.
This wasn’t something that the ministry of finance woke up and introduced. The Finance bill went through the FEC. It went to the National Assembly as an executive bill from Mr. President. At the end of the day, it was passed and they signed it into law.
“We were engaging with customs and the Nigerian Communications Commission (NCC) about implementation,” he said.
On the rising fiscal headwinds, Akabueze, said that Nigeria may seek relief from the International Monetary Fund (IMF) if it is unable to address its problems before they escalate.
“Essentially, there are two ways countries end up with the IMF. One is voluntary when they ask IMF for help, or when things get to the grind where they simply have no other option.
“I don’t see Nigeria going to the IMF voluntarily. It’s a hot issue here in Nigeria. But the honest truth is that if we don’t address our fiscal challenges in a sensible and sustainable manner, we may end up unwillingly with the IMF,” he warned, but assured that Nigeria wasn’t at that kind of desperate situation yet.
He added: “We are not there yet. But we could as much stop digging. There is a maxim that if you find yourself in a pit, you should stop digging and start climbing out.
“If we continue to fund regressive deficits, it is tantamount to continuing to dig. If we continue to pass on reasonable opportunities to increase revenues by introducing taxes, it is tantamount to continuing digging.
“Even though I said we should not cut expenditure in total, we need to get more efficient in our spending. If we don’t do that again, it is tantamount to continuing to dig.”
Stressing that petroleum subsidies were not sustainable, Akabueze advised that gains from the removal should be redirected to unlocking investment potential in the oil sector, adding that it was unreasonable to keep exporting
crude without refining it more than 60 years after oil exploration and production began in the country.
