Governor Adams Oshiomhole of Edo State has said that the current financial crisis that prevented many states from paying worker’s salaries for several months was caused by wastage in capital and recurrent expenditure.
Oshiomhole while speaking at a 3-day retreat for members of the State Executive Council and Permanent Secretaries holding in Abuja urged his colleagues to stop blaming falling crude oil prices for their financial woes.
He said “There are still a lot of wastages in our system. From our experience in Edo, without attacking wages, we have cut a couple of things without having to physically carry out retrenchment in the way that some other state governments have done. At $45, I believe it is a high price for crude, but I think the problem is that we have assumed that when the price rose to $140 and stabilised at $108, that became the new ideal level.
“So, when it dropped to around half of that, we think we are in crisis. When I look at what the number was in 1999, at the beginning of this democracy, it was less than $40, and we still had a fairly balanced budget looking at the ratio of recurrent expenditure vis-à-vis capital expenditure.
“Now if you appreciate that we were doing relatively well at $28 dollars, and that Nigeria met its wage bill when oil crashed to $10 not too long ago, about 1997, the country was not known to be in arrears of salaries.”
He also added that a lot still needed to be done to ensure his administration finished stronger than it started almost seven years ago.