VOICE OF COURAGE: Selected speeches of Obafemi Awolowo (Vol 2)

Continued from last week

AT the moment, however, our financial situation is far from being a happy one. The gap between expenditure and revenue widens with each day that passes: the one increasing by leaps and bounds, whilst the other steadily falls short of estimates. In the result, the Federal Military Government has had to have recourse to inflationary financing. There is, however, a limit beyond which this method of financing must not be allowed to go, if we are to avoid complete economic disaster.

Furthermore, our foreign exchange position shows a more or less similar trend. Payments for military equipment make an ever-rising demand on our foreign exchange reserve, whilst because of delay in the shipment of our agricultural export products, and of the temporary cessation in the exportation of petroleum products, our foreign exchange earnings are also falling short of estimates.

It is clear, from all that I have said, therefore, that, as a matter of great urgency, the Federal Military Government must do something about our finances. In this connection, it has adopted two lines of approach to economise our financial resources and to raise additional revenue.

With regard to the first line of approach, it will interest you to know that, ever since the launching of the military operations, the Federal Military Government has embarked on strict austerity measures, some of which are meant only for the interim period, whilst others are intended to remain as a permanent feature of our public life, I will briefly enumerate some of these measures.

Every Ministry, other than the Ministries of Defence and Internal Affairs, is enjoined to make one per cent savings in its approved estimates of expenditure. But from the next financial year, even stricter economy will be enjoined on all Ministries and extra-Ministerial departments.

1. ii) The Federal Executive council has set up a Committee to examine the structure of Government-sponsored Corporations and Companies in the light of the’ reports and recommendations of the Tribunals set up to inquire into the affairs of some of them, This is done with a view to putting these Corporations and Companies, properly and viably, on their feet. At the moment, most of them are ailing and sick; and the Federal Military Government is determined, not only to cure them, but to prevent a future relapse of their ailments, so that they may be self-sufficient and profitable, and hence cease to constitute an incessant drain on the finances of the Federal Government.

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iii) Capital projects in respect of which the Federal Military Government has not irrevocably committed itself are postponed for the time being.

1. iv) All Federal Commissioners have agreed to observe a stringent Code of Conduct which precludes them from enjoying any benefit, and receiving any allowance, other than their salaries. A Committee has been set up to consider the advisability of reducing the number of our Foreign Missions. These Missions cost us a fortune in foreign exchange, and there is no doubt that some of them are maintained for prestige purposes only.
2. vi) Steps are being actively taken to recover arrears of income tax and duties. Arrears of income tax amount to well over £4 million and those of excise duties to over £5111.

vii) Pending the setting up, at an early date, of a Tribunal of Inquiry for the purpose of recovering ill-gotten gains made by some public officers and their self-employed collaborators, the Inland Revenue has already assessed to tax the amounts of money which some of the persons, who gave evidence before the Tribunals which inquired into certain Corporations, had admitted as having been legitimately made by them as incomes, but which they had not in the past declared as such to the Inland Revenue, As a result of investigations made up to the end of September, a total assessment of about £2 million has been made. Much more than double this amount is expected when the investigation is completed. I would like to say in passing that the taxes collected from these assessments will be offset against the total amount of any individual confiscation.

viii) A much tighter control than ever before is now being exercised in the use of our foreign exchange reserve, care being taken, at the same time, to ensure that our foreign trade is in no way hindered. But when all these have been done, there is still a considerable gap to be filled if we are to fulfill the social objectives to which I have previously referred, and to which the Federal Military Government has committed itself. It is in order to fill this gap that the Federal Military Government has decided to raise additional revenue from sources which I will now outline to you.

But before I do so, I would like to state the principles by which we have been guided. They are: to save our foreign exchange reserves from being run down to a dangerous level;

1. ii) to preserve the strength of the Nigerian;

iii) to have enough financial resources for the purposes which I have previously mentioned, namely: rehabilitation, resettlement, reconstruction and new development;

1. iv) to encourage local industries, and thereby save foreign exchange, and progressively achieve self-sufficiency in, at least, non-durable consumer goods; and to obviate the danger of a runaway or uncontrollable inflation, The measures which the Federal Military Government has decided to introduce for the purpose of raising additional revenue, and conserving our foreign exchange come under five heads.

To be continued