Nigeria’s former Finance Minister, Dr Ngozi Okonji-Iweala has emerged the new Director General of the World Trade Organisation.According to sources from the European Union, she…
OPEN LETTER TO THE NATIONAL ASSEMBLY.
Chairman & Vice Chairman,
National Assembly Complex.
Re: COVID 19 AND THE NATIONAL BUDGET 2020.
The above subject matter refers. The fact that the currently ravaging covid 19 pandemic has continued to wreck havoc into the socio- economic life of government and people of Nigeria is not debatable.
The unpredictability of it’s spread nationally, it’s penetration and devastating effects on citizens is unprecedented and by far, more alarming than anything we have everseen in our national existence. When it finally dies down as it will eventually, it’s Toll on the national economy and financial well being of the citizenry and it’s attendant misery will be unimaginable.
Prior to it’s Advent, our economy was hit by a potentially fatal blow, which was that of the calamitous fall in international crude oil prices, which went far below our projected barelmark of $57 and reached such a low level of below $30 per barrel. This is a point where there is a dangerous equalization of our production cost and selling price.
A future financial crises is certain and another recession is just waiting to create future paralysis of our finances as a people and as a nation, and this is not doomsday hypothesis. While the government must keep it’s eyes on the ball, that is to continue paying serious attention to the effective management of this pandemic, it must also begin to plan for the economic downturn that will befall the Nation, when all of this is over.
The epidemic has caused the federal government to spend the money it does not have in order to be able to contain the pandemic. At the end of the day, a sum in the range of #1trillion may be consumed in various activities that must be undertaken to save lives.
The Operators of our MSMESs ( medium, small and micro enterprises) which is responsible for about 80% of jobs in the country, would have spent most of their operating capitals, usually less than #50,000, for the Micro and Small operators which constitute about 99% of the MSMEs, while obeying the various lockdowns and stay at home orders of federal and state governments.
If no plans is made to reflate them, Nigeria will be plunged into a socioeconomic catastrophe such as has never been experienced hitherto in the history of this Nation.
In view of all of the above grave considerations, I will like to humbly submit the followings for your considerations.
But first, let me state categorically that I based the recommendations below not on any resourceful economic discipline, known principles or knowledge but based on my personal assessment as a stakeholder, my experience in government and closeness to power over the years. They are therefore not sacrosanct but meant to draw your esteemed attention and possibly provoke positive debates and beneficial actions.
1) The President should declare a state of emergency as soon as it is practicable; and assume emergency powers,limited only to finance and economic matters.
2) Budget 2020 must be suspended immediately a process of drastic review commences strictly along the following lines:
a) National Security
b) Welfare of Nigeria citizens.
c)Reflating the MSMEs.
d) Adopting a single exchange rate for all transactions.
e) Complete removal of all existing subsidies.
f) Major attention to rebuilding and modernizing Healthcare infrastructure.
G) Suspension of allocation for all capital projects by up to 60% to 70%.
H) provisions for new road construction to be suspended and emphasis in the reviewed budget on road maintenance and Rehabilitation.
I) Direct grants to old, aged,pensionersand the vulnerable in our society.
J) Reduction of all revenue benefits in the ministries and parastatals by 50%.
K) National Assembly, salaries presently at 50% due to voluntary donations of members should be sustained at that level yill the end of the year. While the National assembly budget also be reduced by 50%.
Please permit me to expand briefly on item 2[C] above.
In the past decades, our national budgets have remained essentially elitist and principally aimed at satisfying the whims, caprices and greed of the ruling class; which often times have been exploitative end parasitic.
Most of the beneficiaries are people in government, their agents and friends, the civil service, Ministers, legislators and foreigners.
More than 70% of the annual budget finds its way to be transferred to foreign lands through various bogus contracts, elephant projects and direct stealing.
Maybe we can halt this trend and use the covid 19 saga as turning point or watershed to use our national budgets as instruments for national and human capital development in the country.
In many advance countries, citizens benefits directly, that is through cash payment, grants, and loans from the national wealth.
In Nigeria, it is an abomination to see budgetary allocations being directed to assisting the poor and needy amongst us.
The MSESs in Nigeria has a membership of about 37million enterprises. They employ 80% of the workforce in the country. If for any reason, they are unable to go back to work after the covid 19 pandemic, the on economy will hit the bottom, misery and hunger will take over the land and civil unrests, riots may disrupt or distroy the fabric of our societies and worsen the security situation in the nations.
I want to strongly recommend that from the various savings that some of the above suggestions may bring if implemented, the SMEs,(that is small and micro enterprises) employing 10 -49 for small and 1-9 people for micro, which constitutes 99% of all the MSMEs, should be given interest free loans of about #50,000, minimum, repayable over 24 months. SMEADAN , has a record or register of these enterprises, and it can further be strengthened by increasing it’s capabilities at state levels, for the purpose of executing and administering this programs. Nobody should be paid in cash. Enterprises must have been previously registered and have a bank account not less than 2years old.
The Medium scale Enterprises about 1% of the 37million can be given loans of #50million to 100million and compelled to employ 10 to 20 people each as condition for qualification for such loans. Similar palliatives on a lesser scale of between N10,000 to N20,000 can be offered to registered artisans and organised market women and petty traders nationwide.
We can also employ tax incentives for bigger enterprises companies through the existing CBN Initiatives and operations of the BOI. These initiatives will be targeted at increasing youth employment nationwide. With close to 40million enterprises working, and massive financial assistance to entrepreneurs at the lower cadre,and encouraging youth employment through MSMEs and the big players, the economy is bound to improve and grow in a sustainable manner. This will push our GDP upwards and Recession will not constitute any threats to our presently precarious economic situation. Let us use the Nations wealth for the benefit of the majority of our citizens not just a privileged few. We cannot afford to be arrogant or uncaring in our disposition to provision of good life for our own people. The wealth, fortune and common patrimony in our care is not just for us and our relations and friends but for the common good of all. Let us remember that poverty anywhere endangers prosperity everywhere. Former Prime minister of Britain once said ” failure to act when action would have been simple and effective, lack of deep thinking and confusion of counsel, all this lead to endless repetition of history.”
I thank you for your patience and kind attention. Dr Doyin okupe fmr SSA to Presidents Obasanjo and Goodluck Jonathan
Dr Doyin Okupe