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

Now, how does a target objective of the Federal Executive to abridge the procurements laws so as to achieve a maximum four weeks processing of contract award circle translates to dictatorship as being canvassed by some? Or how does the desire by the President to increase the mobilisation fund for Federal contracts from 15 percent […]

Now, how does a target objective of the Federal Executive to abridge the procurements laws so as to achieve a maximum four weeks processing of contract award circle translates to dictatorship as being canvassed by some?
Or how does the desire by the President to increase the mobilisation fund for Federal contracts from 15 percent to 50 percent turns him into a tyrant? One can only imagine the impact of these measures on our financial and the larger economic ecosystem. The 50 percent increment in contract mobilisation is a facilitation of liquidity in the banking system; this will help the cost of contract execution in many ways. Rather than approach money deposit banks to borrow money for contract execution at the usual high cost, it is the banks, in this new scenario that would hanker after contractors for deposits. This would incrementally lead to a surfeit of liquidity in the banking system and aggregately reduce the cost of lending.
I am confident of an impressive reduction of the Monetary Policy Rate (MPR) in the first four months of the economic emergency. The MPR determines the rate at which money deposit banks lend money to their customers. This mobilisation fund increase will further drive the creation of jobs in the immediate as contractors mobilise to sites or commence purchases of supply items as the case may be.
Again, I wonder what manner of dictatorship is engendered by the President pulling all the plugs to stabilise the Naira-dollar exchange rate by tapping into a potential treasure trove within the Nigerian fiscal environment that could yield up to $50billion within a year? Yes, it is very possible! The nation’s Economic Team reportedly proposed in the bill that by selling off or leasing our national assets we should be able to raise that princely sum.
Of course, one ready sector to achieve this is the oil sector, the Economic Team must be looking to dispose of Nigeria’s holdings in the Joint Venture
Partnership with some upstream oil companies; another oil bid round would yield some more dollar value plus value added public bids for solid mineral fields even as the transparent disposal of telecommunications broadband would help in this regard. Perhaps of higher potential is the sell-off of the huge assets seized from corrupt government officials, especially from those of the recent past administration.
A $50biilon addition to our reserve will certainly provide a cooling effect to the current ill-tempered downward drive of the value of the Naira in exchange for the dollar. We need this quantum addition to our national reserve especially in consideration of the urgent need to diversify the economy. Though this is coming more than 40 years late, at the present rate of exchange we will be diversifying at very high cost relative to what we would have achieved between 2011 and 2015. The burden of that cost of diversification will negatively impact the process and speed of diversification except we activate a creative approach to raising more dollars to fund importation of machinery, equipment and raw materials.
Seriously, we need this Emergency Economic Stabilisation law! Still talking about dictatorship related to the law, I can’t fathom the character of dictatorship that seeks to reduce the counterpart funding of the Universal Basic Education (UBE) fund by State from 50 percent to 10 percent to enable States conveniently access the trapped fund.
Understandably, so many States are financially constrained, a direct consequence of dwindling distributable federation account fund linked to falling oil price and production incapacitation as a result of the bombing of oil and gas pipelines. The inability of many States government to access the UBE’s intervention fund because of the disincentive of the 50 percent counterpart funding has stunted the development of education in these States. School pupils and students now attend classes under trees or in morbidly dilapidated classroom blocks.
So far, it is reported that about N52 billion is locked down in the fund. I imagine what the convenient release of the fund will do to the economy of those States. Money for contractors and suppliers, more jobs plus the standardisation of education infrastructure. Good news can’t be better presented than this!
For certain, no dictatorship is implied in the expectations of reducing the turnaround time for registration of businesses by the Corporate Affairs Commission or the licensing of products by the National Agency for Food
Administration and Control and the reduction in time period for the issuance of visa to foreign business people. All these aggregate to a refreshing new template of ease of doing business. This will help incentivise a higher traffic of foreign investors into the country.
I strongly believe this is a fast track strategy to getting out of the gloomy recession that threatens to retard our economy, yes; some other arguments insist these emergency powers may open the processes and procedures to abuse and corruption. This is where the trust we have in President Buhari should transcend other sentiments and considerations. This is the time to line up behind the President in the onerous task of leading us out of the looming recession.
I like to submit that even if the Economic Team or the President is not giving this Economic Emergency Stabilisation law serious consideration, it is time they do. It is also time good conscience Nigerians prevail on the President and Economic Team to gift us this law through the National Assembly as sure fire route out of our frightening economic situation.
Chief Akinsiju, a Policy Analyst, wrote this piece from Abuja.