Many benefits of the proposed emergency economic stabilisation bill (i)

Our most recent cause for another round of abrasive comments and countermanding ripostes is this innocuously named “Emergency Economic Stabilisation Bill 2016,” said to have been in the works by the National Economic Team. I thought the implied substance and purposes of the bill as titled were obvious enough until some fellows created this cacophonous […]

Our most recent cause for another round of abrasive comments and countermanding ripostes is this innocuously named “Emergency Economic Stabilisation Bill 2016,” said to have been in the works by the National Economic Team. I thought the implied substance and purposes of the bill as titled were obvious enough until some fellows created this cacophonous wave of inciting debate over what should have ordinarily excited the nation.
Though a statement issued by the office of the Vice President seems to neuter the plan to forward the bill to the National Assembly, I, however, wished to God that the news ascribed to State house sources by some mainstream media was, indeed, true.
If we discount the sinister equivalence of the emergency powers allegedly sought by the President to remove encumbrances in the challenging path out of the technical recession that threatens to further violate our individual and collective economic well-being to that of the powers wielded by the President under a political declaration of a state of emergency, the Emergency Economic Stabilisation Bill 2016, if it is truly to be introduced to the National Assembly, should be applauded.
Basically speaking, countries declare economic emergency in times of debilitating economic crunch or financial meltdown. Political declaration of a state of emergency usually involves suspension of certain sections of the Constitution including the shutdown of parliament and the emasculation of the powers and privileges of other institutions of state and individuals. Recall the state of emergency declared by ex-President Olusegun Obasanjo in Plateau State in 2004 and Ekiti State in 2006.
The Declaration of economic emergency on the other hand, is activated in active collaboration and partnership with the parliament, to, within a given period, abridge particular laws as they affect the pace and speed of the implementation of economic policies. And thereby fast track process and procedures to achieve targeted resolutions within a certain period.
In 2009, President Barack Obama of the United States of America, in the face of the United States financial sector crises which precipitated a worldwide economic slowdown and desirous of managing the crises through unprecedented fiscal stimulus, monetary policy expansion and institutional bailouts, he approached the U.S., Congress which passed the American Recovery and Reinvestment Act of 2009. This facilitated the adoption of palliative monetary and fiscal policies to lessen the shock to the economy and eventually saved the US and the world from what was then described as the worst recession since the great depression of 1929.
The logic that compels economic emergency is the exaction of exigency, the extra power availed the President by the National Assembly to act beyond the confines of extant laws within a given period to stabilise the economy.
The Nigerian economic situation profiles a heady trilemma; stagnating productive capacity and riling cost push inflation, these two together are what economists fearfully describe as stagflation, no country wants to come near being ascribed that term. The third of the trilemma is the desperate shortage of foreign exchange which is a major reason for all manners of constraints and unpredictability in the economy. These are the monsters that the Buhari’s government needs to confront, the aggregation of the debilitating recession that sits with us like a shadow.
Wonder how do we get out of this recession with a miserly $25 billion foreign reserve in a country that spends average $52 billion a year on importing goods and services from other countries? How do we rack up the desperately needed dollar in our foreign reserve with the brazen assaults on our oil producing assets leading to the reduction of targeted crude oil production benchmark from 2,200 million barrels per day to less than 1,500,000 barrels per day, crude oil being the major contributor (90 percent) to our foreign exchange earnings?
Even now that the Buhari’s government had spectacularly reworked the historically low ratio in the yearly budget expenditure formula at 30 percent capital expenditure to 70 percent recurrent expenditure, yet, how would the more money, the liquidity that is expected to galvanise productive activities get into the nation’s economic orbit when our procurements laws prescribe a long route to contract procurements and implementation stated at an average of six months?
Now, there’s nothing wrong with our procurements laws as they are, they are control and checking system to curb corruption. But at times like these, when the economy needs urgent dosages of funds at the shortest possible time to provide liquidity; it may be appropriate to trust our President to lead the initiative for the given period.
Experiences in countries across the world have shown that it is a most difficult venture to exit recession; it is like trying to run in mud, held down by all levels of inhibitions. Most countries that had declined into recession have remained in that vortex of economic inertia, recent examples have added Venezuela. God forbid!
Of course, we can afford to wait out the recession by sustaining the status quo but at what cost? Already, there are troubling cries of hunger across the land and stringent calls on government to address the riveting distress in the system very quickly. This is why the option of economic emergency stabilisation is more attractive in our present circumstance.
How many times have we heard in the past about how government officials at different levels vire money meant for a budgetary head to another without recourse to the parliament? This is a breach of the appropriation law, yet it has become routine conducts in official circles, nothing exemplifies impunity than this.
Apparently, the Buhari government would be breaking ranks with historical conduct of managers of the national economy with the Economic Emergency Stabilisation law. Virement is a necessity of budget implementation reality but it has to be done within the ambit of the law. In fact, if the law is properly applied, a legislative unapproved virement is an impeachable offence. With the request by the President, through the Economic Emergency Stabilisation Bill to the National Assembly to empower him to use his discretion to vire budgetary expenditure heads from least needs to national strategic needs, we would be going back to the path of orderliness and sanity.
Chief Akinsiju, a Policy Analyst, wrote this piece from Abuja
To be continued next week