The dire situation of the country’s economy has compelled the Muhammadu Buhari administration to think out of the box following government’s proposal for an emergency power to reflate the economy. WALE ELEGBEDE and TEMITOPE OGUNBANKE report
When the administration of President Muhammadu Buhari took over the reins of leadership of the country about 15 months ago, many Nigerians, including those opposed to the emergence of the former military Head of State, were expectant of one thing – change.
But more than year into the life of the administration, the shape and state of the economy has made many citizens to start to think otherwise about the capacity and competence of the All Progressives Congress (APC)-led government to take the nation out of the woods.
From the plunge in revenue occasioned by the falling prices of crude oil, which is the mainstay of Nigeria’s economy to the activities of Niger Delta Avengers, who are blowing up oil installations and thereby reducing the volume of the country’s crude oil sale, tumbling of the naira against major foreign currencies many have averred that the books are not looking good for the current administration to quickly fill the economic gap in the immediate.
On a daily basis, the narration of the country’s economy appears bleak.
Aside experiencing contraction by almost 40 per cent with the Gross Domestic Product (GDP) standing at $296 billion from $501 billion, the recent rebasing of the continent’s economy that saw Nigeria being the knocked off by South Africa as Africa’s largest economy, appears to be the icing on the cake that perhaps got the administration’s economic team back to the drawing board.
Although many reasons are been adduced by the Federal Government for the parlous state of the economy, some Nigerians, however, don’t want to listen to the long list of excuses from the government and its sympathizers over the plummeting economy.
In fact, some find it hard to reconcile why the nation’s currency has continued to fall against the dollar. For the government and rightly so, the comatose state of the economy was not its making but a combination of many avoidable and unavoidable factors. For the administration, the primary blame should be placed on the activities of past governments especially the immediate past administration of former President Goodluck Jonathan.
The Jonathan administration was labeled as being culpable in the conspicuous deficiencies in fiscal and monetary policies, massive corruption, inability to diversify the economy and failure to address challenges of decrepit infrastructure. Perhaps, last week’s nugget for the administration by the Emir of Kano, Alhaji Mohammadu Sanusi, on the economy might be a bitter pill to swallow, but many believe that the context of the charge is the timely reality of the state of the nation.
The former Governor of the Central Bank of Nigeria (CBN), who spoke at the 15th meeting of the Joint Planning Board and National Council on Development Planning in Kano State, said some policies of the government were bad for the economy, adding that Buhari must retrace his steps. “We should not just keep blaming the previous administration; we also made some mistakes in the current administration. “They must retrace their steps. They have to retrace those steps all the way.
We should not fall into the same trap we fell the last time when the government was always right. The bottom line is that if your policy is wrong, it means you must change it and nothing will make it right as it has to be changed. “If this government continues to behave the way the last government behaved, it will end up where Jonathan ended. The country has not been able to attract investment. We need to move from our present mode of investment.
“The funny thing is that you did not stop borrowing; all you have to do is borrow the right amount and apply them to the right purposes. It doesn’t matter whether it is consumption spending or investment demand, the GDP will grow. ‘’Countries like Nigeria and Angola are among the lowest growing countries of the world, growing with the rate of Europe and Latin America. We are the worst performers in terms of investment,” he said.
While the Federal Government through the Minister of Finance, Mrs. Kemi Adeosun, has admitted that the country is currently on technical recession, many, however, opined that the economy is in full blown recession and may likely drift to depression if concerted efforts are not made by the government to address the deficits in the economy.
Economists measure recession in an economy by two negative growths periods, which literarily means that a decline in Gross Domestic Product (GDP) of a country for two or more consecutive quarters is a recession period.
Interestingly, the National Bureau of Statistics (NBS) report for 2015 showed that the country had negative growth periods all through the year. In one of the many efforts to stimulate the economy, Adeosun said the government had released over N450 billion for capital projects funding, adding that, “we are pumping money into the economy at a very rapid rate.”
While cautioning that it would take time to start feeling the impact due to the time lag between spending and effects, the minister said the procurement process that usually accompanies capital projects was slowing down releases.
Perhaps, the economic team of the current administration realised that the long rope of the procurement process in capital projects, is one of the bottlenecks affecting the quick delivery of democracy dividends to Nigerians, hence, the need for a stop-gap measure to salvage the economy. In a report exclusively obtained by some select newspapers including New Telegraph, the Buhari administration is said to be seeking the approval of the National Assembly for emergence powers in order to urgently address the economic lockdown of the country.
A bill, titled: Emergency Economic Stabilisation Bill 2016, which is in three parts: Objectives and application; Timeliness, thresholds and other limitations; and miscellaneous, is expected to address all the contending tailbacks to the growth of the economy in the next one year.
It was learnt from government sources that the decision to seek emergency powers for the President was based on a proposal from the economic team headed by Vice President Yemi Osinbajo after a thorough review of the various policies so far introduced by the administration and how they have affected the economy.
The economic team, it was learnt, gauged the mood of the polity and decided that unless there is an urgency which some of the extant laws will not permit, “The recession may be longer than expected and Nigerians will not get the desired respite, which is the goal of this government.” In the bill, the president wants to carry out radical reforms that have both executive and legislative components. The executive orders will involve issuance of visas, registration of businesses, granting of waivers, process of tendering and sales of non-core assets. The emergency powers that have the legislative components include the Universal Basic Education Commission (UBEC) Act, procurement process and virement of budget allocations.
It was gathered that the objectives of the emergency powers are to reflate the economy by creating more jobs, boost foreign reserves, ensure inflow of foreign exchange, strengthens the naira, resuscitate the manufacturing sector and get contractors back to site. A source in the Presidency confirmed to New Telegraph that the radical reforms are in the executive bill, which will be tabled before the National Assembly.
According to the source, “the president is worried about the state of the economy and attendant hardship in the country. And to tackle some of the challenges, President Buhari is seeking for emergency powers to carry out radical reforms in the polity. “Buhari must respond frontally to the challenges of recession. He can’t do it under the extant conditions. He is now seeking powers to enable him roll out some economic packages.
“In three days’ time, Buhari will be seeking from the National Assembly powers to amend procurement process in order to support stimulus spending in critical sectors; he is seeking power to favour local suppliers/ contractors in contract awards.”
In the area of budgeting, Buhari plans to issue executive orders to allow virement of budgetary allocations of projects within Ministries, Departments and Agencies (MDAs) that are of topmost priority.
Noting further, the source said that the president is concerned about the delay in the procurement process, which takes more than six months. Hence, Buhari is seeking the suspension of Section 34(3) of the Public Procurement Act.
This, according to sources, is to ensure that the administrative encumbrances in the procurement process and award of contracts are done away with. The president is also considering sales of noncore assets to raise money. “Nigeria has a lot of noncore assets that can be sold to reflate the economy. But the process to lease or sell the assets will take one year.
So, the president wants to fast track the pro-He believes that there is no need keeping those assets if the nation can generate over $50 billion through lease and sales.” It was learnt that Buhari is proposing two approaches to issuance of visa.
One is visa on arrival while the second one is to ensure that henceforth, tourist and business visas are issued within 48 hours at all the consular offices of Nigeria. Buhari is also seeking the nod of the National Assembly to amend the UBEC Act so as to free the N58 billion trapped in the Fund as a result of the inability of the states to pay 50 per cent counterpart funding. The President wants an amendment to the Section 11(2) of the UBEC Act.
“Today, N58 billion is trapped in UBEC Fund. The law states that states must pay 50 per cent counterpart funding. Unfortunately, many states can’t pay because of their financial situation. You know payment of workers’ salaries is a big issue for most of the states.
“So, the President will be seeking amendment to the UBEC Act which manufacturmandates the states to commit 50 per cent of the counterpart fund. With the proposed amendment, the states will only be required to contribute 10 per cent instead of 50 per cent,” the source said.
In sum, the President will be seeking from the National Assembly when they resume from their recess on September 12, to do the following: abridge the procurement process to support stimulus spending on critical sectors of the economy; make orders to favour local contractors/suppliers in contract awards; abridge the process of sale or lease of government assets to generate revenue; allow virement of budgetary allocation to projects that are urgent, without going back to the National Assembly and amend certain laws, such as the Universal Basic Education Commission (UBEC) Act, so that states that cannot access their cash trapped in the accounts of the commission because they cannot meet the counterpart funding.
As expected, Nigerians are divided over the proposal. While some hailed the move and expressed the belief that the approach was long overdue, others averred that the President does not any special power to pull the nation out of its economic brink, since he wasn’t granted any extra power to tackle insecurity in the North-East and the war against corruption.
For the chairman, Small and Medium Enterprise Group (SMEG) of the Lagos Chamber of Commerce and Industry (LCCI), Mr. Jon Kachikwu, the idea of seeking an emergency economic bill is a welcome idea. He added that the move is in tandem with the position of private sector groups.
The LCCI SMEG boss also explained that reviving the country’s economy at this time of recession will be a big task for the government because of the dwindling economic fortunes in the country, which was already battered beyond repairs. “President Buhari must change his current economic policies in the country as they are not impacting positively on the country’s economic growth and development.
His move to approach NASS for emergency economic stabilisation bill is a welcome idea in all ramification and we (OPS members) are ready to support him in this move but we doubt if that will be the antidote to retuning the country’s economy at this time. I still believe that going back to the drawing board will be the only lasting alternative to the country’s economic downturn.”
On his part, the National Chairman of the United Progressives Party (UPP), Chief Chekwas Okorie, urged the National Assembly to look at the bill critically. he said: “If the power that the President is seeking is already in the constitution, then there is no point of duplicating power.
But if what he is looking for is a temporary measure to get Nigeria out of the wood, the National Assembly should consider it patriotically and with the best of intensions.
“This is not the first time a President is finding solution under the economic circumstance we are into, in seeking for extra ordinary power to be able to solve the economy problem; it has happened in other climes.
So, if the bill is for economy reason and not political reason, I will urge the National Assembly to look at it very dispassionately and support the president to do what is needful because our economy needs a rescue programme. “I am in support of the bill but not without National Assembly having a dispassionate and critical look at the power the President is seeking.
The National Assembly should make sure that the power the President is seeking for is power to get the economy out of the wood. I believe that our economy require such intervention to be able to get it out of the wood. The economic situation is really critical now and the government must be supported to solve the problem.”
But Special Adviser to ex-President Shehu Shagari in the Second Republic and Chairman of Northern Elders Council, Alhaji Tanko Yakasai, differed with those supporting the bill.
According to him, the President does not need any emergency legislation to solve the country’s economic problems. “People should be weary of giving any former military Head of State a lot of power because they don’t know where to stop. We all know about the Odi massacre in Bayelsa State during formerPresident Olusegun Obasanjo’s administration.
“The case of former National Security Adviser, Colonel Sambo Dasuki (rtd) is another example. Despite granted bails by various courts, Dasuki is still in incarceration.
The truth is that military people when they are fighting don’t know where to stop; so it is danger- ous to give them a lot of power. Adding his voice on the issue, the National Publicity Secretary of Yoruba Unity Forum (YUF), Kunle Olajide, said the president and his economic team should still consult widely with experts in the field of economics. “I believe the President has enough powers already to tackle the economy.
I think we have too much power concentrated in the centre already, so personally, I do not think there is need for any emergency power to address our economic problems.
“I think the National Economic Team must consult experts in economics in the private sector and everywhere to be able to get the necessary remedy to address the problem. But emergency power for me will be too wide, so I personally do not support it.
National Democratic Coalition (NADECO) chieftain, Chief Ralph Obioha, believes that the National Assembly should expedite work on bills from the executive that touch on the plummeting economy, stating that the two arms of government must swiftly work together to save Nigeria economy from collapse.
His words: “Any democrat will not accept an emergency power outside the emergency power entrenched in the sovereignty of Nigeria. It is only in a situation of war that an emergency power should be contemplated. The reason why we have National Assembly is for the executive to go to them and get whatever measure needed.
“So, the President has the National Assembly to work with and if there are laws that he wants to enact to help the economy, he should be able to take it quickly to the National Assembly and I am sure that National Assembly members as patriotic Nigerians will look into the bill and draft the necessary laws that will enable the president to tackle the economy problem.”
As all eyes turn to the National Assembly to make the details of the proposal known when it resumes plenary next month, there are lots of questions already begging for answers over the proposal.
But one thing is irrefutable, the President and his team have been able to think out of the box to move the nation forward and it is left to be seen to what extent the proposal, if granted, would pull the nation’s economy back from the brink.
by Wale Elegbede and Temitope Ogunbanke – New Telegraph
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