Season of discontent

There is a general feeling of discontent all over the world. It is not only in Nigeria that gloom and sadness prevail. There is a general feeling of insecurity in the wider world because of the war in Ukraine which may eventually draw in the NATO alliance and the possibility of nuclear conflagration.

Added to this, is the possibility of conflict between the United States and China over Taiwan.  Furthermore, the enduring presence and the aftermath of the coronavirus pandemic and its disruption of the world economy are still very much with us.

We in west Africa feel threatened by ethnic, climatic and religious onslaught from the Sahara and the Sahel. The rest of the world is affected by this global uncertainty which is creating not only unease but trepidation about things going out of control. For the ordinary Joe on the street, what concerns him most are economic problems of food, inflation, cost of housing and health, job and family security and the future generally. There is a commonality of issues riling the public. Prices are going up all over the world while salaries remain the same. This feeling of helplessness is more acute in the developing world.

In Nigeria, the economy has virtually collapsed. This collapse manifests in the weakness of the national currency in relation to other currencies of the world. The Naira has become a glorified coloured paper! The result of this weakness on a largely dependent economy is the runaway inflation experienced in the country. Ordinary bread has been priced out of common reach and so also all products requiring the use of flour. Vegetable oils imported from Europe, particularly Ukraine and Asia, are no longer in the market, and when found the prices have gone through the roof.  All imports, including drugs, industrial goods, petroleum products like gasoline, diesel, kerosene, LPG, vehicles have more than doubled in prices. The price inflation of these products has inflationary effects on locally produced goods, including food like Gari, Yams, meat and meat products, even leafy vegetables have all become outrageously expensive because of the cost of transportation.

In other words, local inflation is being fuelled by imported inflation. We are getting nearer to the Sri Lanka situation where because of foreign exchange shortage, we are going to be cut off from the markets of our trading partners in America, Europe and Asia as well as countries on the African continent.

Recently, foreign airlines are either suspending flights to Nigeria or are making flights so outrageously expensive that it will be difficult to maintain regular contact with the outside world unless the situation changes soon.  How did we get to this pass? The answer is straightforward. Our rulers have so totally mismanaged governance to the point that they can no longer guarantee security and sanctity of lives. Neither can they assure economic productivity and production. There is neither a sane nor secure transportation grid by road, rail nor by air.

Peaceful agricultural pursuit by peasant farmers is no longer safe. Generation and distribution of power have become almost insurmountable. Education, particularly higher education, has broken down due to incessant strikes. Social activities and recreation and almost every aspect of artistic lives that make life worth living have been vastly eroded.

At a time when all members of OPEC are celebrating huge windfall of dollars, 87 billion in five months in Saudi Arabia, arising from the huge increase in the price of petroleum, Nigeria is caught in the web of outright roguery and stealing of a third of its petroleum production and therefore unable to meet its OPEC allocation. Instead of celebrating, our country is using virtually all proceeds from oil and gas to service external loans accumulated since 2007 after the Olusegun Obasanjo administration got us free of foreign loans peonage.

The Muhammadu Buhari administration, in the last 7 years, has succeeded in not only making us poor but ensuring that our children and grandchildren will remain poor and subservient to international finance and capital. In the face of all this, the state governors have come up with ramifying suggestions to rescue the economy, which in my opinion should be seriously considered by the federal government, but which are being ignored to the economic peril of the country. These suggestions include:

1. Elimination of PMS subsidy/ under recovery -(N6-7 trillion)
2. Elimination of NNPC’s Federation projects (N300 billion)
3. Cap social investment (SIP) and National poverty Reduction with Growth (NPRGS) budgets – (N200 billion – N570 billion)
4. Elimination of extra-constitutional deductions from FAAC – (N100 billion)
5. Reduce SWV items for SDG and NASS constituency projects – (N300 billion)
6. Reduce Duplications (e.g., Empowerment programmes) and wastes – (N100 billion)

7 Reduce 1 percent granted to NASENI to 0.2 percent in the 2022 Finance bill.

8 Reduce personnel costs of FG, MDAs

Offer federal civil servants above 50 years a one -off retirement package to exit the service – (N350 billion) and employ lower cost, more ICT compliant youths and women graduates.

9 Begin implementation of the updated Stephen Oransaye report (N1trillion)

10. Expedite privatisation of non-performing assets (Billions of Naira)
11. Planned 22 percent increase in salaries in 2023 to be reconsidered

12.Reduction of fiscal deficit to no more than 2 percent of GDP IN 2023-2025.

12All foreign trips to be put on hold.

13.Move from state income tax to consumption tax.

State sales tax at a flat rate of 10 percent should be enacted for all states and FCT

14. VAT to be increased to 10 percent and incrementally to 20 percent
15. End CBN financing of FGN expenditures and convert the 19 trillion-naira ways and means outstanding to 100-year bonds at 1 percent immediately.
16. Introduce a flat rate of 3 percent Federal personal income tax on all Nigerians earning more than 30, 000 Naira per month, all others to pay 100 naira per month

This should be deducted from phone credits of individuals by phone companies

17. All federal revenues, including federal oil and non-oil taxes, should be centralised into FIRS and CUSTOMS, NPA and others should merely issue demands.
18. Improvement of offshore crude oil and gas production
19. Give incentives to oil and gas companies to build thieves and vandalism resistant oil and gas pipelines.
20. Encourage and prefinance, if necessary, Dangote Refinery to early completion to reduce massive outflow of foreign exchange.
21. The CBN should refinance and recapitalise Bank of Industry and Bank of Agriculture
22. The CBN should focus on its statutory core areas of exchange rate management, control of interest rate and inflation, and should cease competing with Development and commercial banks.

These, and other suggestions, were made by the governors of Nigerian states and for any reasonable person, these suggestions make sense if we are to rescue our economy from total collapse and ruin. Since these suggestions are coming from a collectivity of state governors from all the political parties in Nigeria, they deserve immediate consideration now that the 2023 budget is being prepared.

Some may dismiss these suggestions as too late and not radical enough.   I think we should rather err on the side of caution than kill the patient with radical treatment. But since these suggestions arose from the collective wisdom and experience of the governors, they deserve to be scrutinised for adoption.

The economy and corruption are central to all our problems of insecurity. If we can solve the problem of the economy, we can then confront the serious issue of corruption. One also hopes that if we can rescue the economy from destruction, we will all be on guard to prevent a recovered economy from being destroyed all over again.