In view of the lacklustre performance of the country’s economy recorded in the last four years, experts insist there is the compelling need for President Muhammadu Buhari to head-hunt creative and innovative minds to form the crux of his new economic team in his next government.
According to development experts and captains of industry, in rejigging the economic team, utmost consideration must be given to persons who combine capacity with integrity, as well as those who would rather give reasons why they succeeded, than continuing the blame game, which has been the hallmark of the administration.
With declining revenue and corruption in the bureaucracy as some of the country’s greatest challenges, they further not that the team must have the will power to carry out actions and enforcements to remove obstacles in the way of revenue generation.And for the Organised Private Sector (OPS), immense premium must be placed on addressing parlous infrastructure in the country and unveiling policies that would further aid the Ease of Doing Business (EODB) in the country.
A development economist, Prof. Ken Ife: “As the revenue crisis is at the heart of debt sustainability and government budget deficit funding, Buhari needs to aggressively pursue and ensure that the Fiscal Responsibility Commission (FRC) implements the Operating Surplus Template so that the 122 MDAs would increase their remittance in volume and timeliness in order to increase government’s funding for projects, and to significantly reduce external borrowing for some non-viable and unsustainable capital projects.
“We need stronger collaborations and alignment of federal and state social inclusion and pro-poor projects targeting employment, self-employment/startups, education, health, organised out-grower-subsistence level agri-business etc. Urgent review of the Economic Reform and Growth Programme (ERGP) must accommodate regional trade and integration issues, including African Continental Free Trade Agreement (AfCFTA), FRC revenue drive and better funding of FRC and indeed moving FRC to Autonomy/ Consolidated Revenue Fund,” Ife said.
And to be able to do all these, he added, “Buhari he needs a vibrant economic team that would address Nigeria’s revenue challenge; a team that would drive the FRC to enforce its mandate by ensuring that revenue generation entities remit monthly, 80 per cent of their operating surpluses to the Consolidated Revenue Fund (CRF) of the government in line with the law.
“If this happens, Nigeria will not need to borrow again because the country would not know what to do with money. What happens now is that revenue generating agencies wait until the end of the year, then they prepare different financial statements for the Office of the Accountant-General of the Federation, and a different one to the FRC,” he stated.
The lead economic consultant to ECOWAS and NEPAD continued: “Buhari needs a team that would put a stop to those red hirelings by making sure that a chief executive officer of a revenue generation agency who flouts this rule is not only sacked, but also prosecuted to served as a deterrent to others. From the examples of some agencies like JAMB and the Nigerian Ports Authority (NPA) that have made billion in remittances, it gives you idea of what is going on in other agencies.
This has become very necessary because our revenue to GDP ratio is very low, more so that this is one core condition for the ECOWAS Monetary Union convergence requirements. Nigeria’s Tax to GDP remains about the lowest at 6 per cent. We need an economic team that posses the capacity to raise the percentage through the widening of the tax net, as well as raising of VAT up to 15 per cent for luxury items, while basic food and health items could be zero VAT.”
For the Executive Director, Civil Society Legislative Advocacy Centre (CISLAC) Mr. Auwal Ibrahim Musa, right now, “Nigeria needs a sound economic team that will review and reform the economy. We need to reform the oil and gas sector to make it efficient, effective and productive to eliminate the corruption that has ravaged the sector. We need to aggressively diversify to agriculture to ensure that it takes its rightful place in the economy.
He added: “ Industrialisation should also be taken seriously because this is the base of development because we are currently getting from bad to worst in terms of industrialisation, and this is principally because electricity has collapsed, and our capacity to generate power is very low. If we must get out of the woods, we must make our industries functional, effective and efficient. With abundant human resources, we have immense potential to make this happen.”
The Transparency International chieftain added that if the country is able to revamp its industries, a lot of employment would be created, “but if we continue with the current parasite economy, we will not be able to create prosperity in the country.
“Furthermore, the President needs a team that would complete the reforms in the oil sector, particularly the Petroleum Industry Bill, which has been in the NASS for a very long time.
”Worried that the business environment has continued to lack fiscal policy support needed to aid business growth, the Organised Private Sector (OPS), is advocating improved relationship between the government and the private sector in addressing recurring challenges in the country.
According to the President of the Lagos Chamber of Commerce and Industry (LCCI), Babatunde Ruwase, there is need for a review of the power situation as poor power supply continues to pose challenges to business operators, despite generation.
He said: “We acknowledge the efforts made by government to improve liquidity in the power supply chain, the drastic reduction in the debt owed to gas suppliers and generating companies, improvement in power generation, and the enhancement of carrying capacity of the transmission grid. We are also aware that the Minister of Power is promoting alternative models to fix the problem at the distribution end.
“But a chain can only be as strong as its weakest link. The distribution end is still grappling with numerous challenges, which limit the capacity to deliver power to end users. The power situation continues to pose challenges to business operators.“There are complaints across all sectors about high energy cost, especially high expenditure on diesel.
The situation has worsened with the increase in global crude oil price. Many businesses spend as much as 20-30 per cent of their total operating cost on generating power. We propose that policies and incentives be put in place to encourage decentralisation and more off grid solutions.
Ruwase requested that the Presidential Enabling Business Environment Council (PEBEC) secretariat should be further strengthened and the scope of its activities broadened to cover all sectors of the economy and all agencies of government that interface with the private sector, “We believe that the economy will be positively impacted if is this is done.”
MAN President, Mansur Ahmed said: “When you are manufacturing, the first step is making an investment, so we want government to look at conditions that will make investments worthwhile. The investment climate is key, and I think we all know this over the years.”
“So, building infrastructure is one of the most critical responsibilities of the government for industries as a whole to be more competitive. One major constraints of the manufacturing sector in the country is that the cost of financing is very high. For instance, if you borrow funds to invest at 20 per cent interest rate, you must make more than 20 per cent for that investment to yield benefits.
The Lead Director of Centre for Social Justice, Eze Onyekpere, said it would be imperative for the government to start with a deep, honest and dispassionate internal review of its economic performance over the last four years.
“For instance, the budgeting system should be made more evidence-based, participatory, transparent and accountable to the needs of Nigerians.
A more transparent and accountable process will increase faith in governance and galvanise the energy of a broad spectrum of Nigerians for national development.There is the need to identify key laws that need to be enacted, those to be reviewed and repealed and submit executive bills to the legislature very early in the life of the administration,” he stated.
Source: Mathias Okwe, Chijoke Nelson and Femi Adekoya (The Guardian)