A senior lawyer, Dr Olisa
Agbakoba has written to President Muhammadu Buhari on issues surrounding the
2020 appropriation bill laid before the joint session of the National Assembly
on Tuesday.
In the letter, a copy of which
was made available on Thursday, the Senior Advocate of Nigeria,
SAN, applauded the President for laying the budget estimate in good time. He,
however, drew the president’s attention to salient issues regarding the budget
and made some recommendations.
President Muhammadu Buhari, on
Tuesday presented the year 2020 budget estimates to a joint session of the
National Assembly.
The letter reads in full:
I applaud the unusual departure
of the Government of Nigeria by laying the budget estimates in good time and
the reciprocity of the National Assembly to pass the estimates in 2019! This is
record-breaking, but alas, this is only as good as can be said of the budget
estimates.
In a country of 200 million and
50% living in poverty, the budget reflects many missing fundamentals. The
starting point with this budget is a diagnosis of our condition. I would
diagnose that Nigeria is afflicted with malignant metabolic economic syndrome
complicated by high inflation, high interest rates, mass unemployment, weak
infrastructure, slow growth, unclear borrowing policy, unaccountable subsidy,
etc..
To turn things around, I like to
assume that you have charged the new Economic Advisory Council to give us short
and immediate solutions. Working from my diagnosis of Nigeria’s economic
disease, we need to work out a macro-economic development framework that lays
out a harmonized fiscal, monetary, investment, legal, institutional and
regulatory agenda. Fiscal policy or rate at which government spends, must be
dramatically expansionary. We cannot have an anemic budget of N10 trillion
Naira for 200 million Nigerians, which is equivalent to N50,000 per person, per
annum. This will keep us in poverty abysmal when we need double digit growth!
On the basis of a GDP of 400
billion Dollars, the baseline annual budget should be 20% which approximates
20-30 trillion annual spend rather than the miserly 10 trillion budget. Our
annual spend is anemic and we have to infuse large money. For monetary policy,
we need urgent quantitative easing, which is easing of all interest rates in
particular to slack the heavy burden of high-interest rates on lending
afflicting long-suffering Nigerians. We must be very proactive to look for new
funds.
Traditionally, public revenue has
depended on tax and oil receipts but there are far too many other sources- the
Maritime sector is laden with cash, agriculture and the blue ocean, trade, the
real sector, and controversial as it may appear, revenue that can be derived
from new legislation on immunity from criminal prosecution. Government must
consider legislation on criminal immunity to those who have plundered us, and
we will likely see massive inflows of our money in foreign banks back to us. At
present, the money is out of our reach anyway! I estimate 100 billion Dollars
will flow back if we grant immunity from criminal prosecutions but with civil
sanctions.
Engagement of the private sector
in partnerships will yield a massive stock of revenue. We need our Dangotes,
Jim Ovias, Mike Adenugas, Innosons to be involved, just like the Chaebols of
South Korea. I know that the Onitsha Nnewi Ogidi market axis can generate up to
10trillion Naira if the proper incentives are offered.
Foreign and domestic investments
in infrastructure is possible if the proper legal institutional and regulatory
environment is established. Public revenue will be enhanced by at least 3
trillion Naira if we rebase foreign exchange rates from N305 to N360 and remove
fuel subsidy at once.
Additionally, we must review
public expenditure. Far too much money is consumed by recurrent receipts.
Downsizing government is a task that needs immediate attention by
implementation of the Oronsaye report. Our public sector borrowing requirement
needs review so that our revenue to debt ratio is less than 30%. Banks must
focus on their primary function of lending not trading as we have seen in
purchase of Treasury bills in excess of 400 billion Naira. Tax collection
efficiency and not increase should be the the policy and Chairman Coker of FIRS
and Governor Emefiele of CBN are 2 public servants deserving special mention
for their innovation.
As an expert in Shipping and
hydrocarbons, I query why government only sees dollars from a barrel of crude
when the value chain has at least 34 soft and hard by-products other than crude
oil. In my field, there is banking, shipping, legal and insurance, but very
little of the cash from this value chain from crude oil stays in our economy.
We need to reset the clock. I will assume that that the budget estimates is
just the start of a turn around process of economic transformation.
Having held their meeting with
you, can the Economic Advisory Council give us a short turn around plan to
create jobs, opportunities and double digit growth? A good plan can create 10
million jobs annually, open the economy, expand local production and put the
economy into double digits and pull millions out of poverty in addition to good
education and healthcare.
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