Key players in the economy on Tuesday x-rayed Monday’s decision by President Muhammadu Buhari to replace the Economic Management Team (EMT) headed by Vice President Yemi Osinbajo with the Economic Advisory Council (EAC) that will report directly to him.
The Manufacturer Association of Nigeria (MAN) and the Lagos Chamber of Commerce and Industry (LCCI) praised the President for taking the decision on the economy.
But a former Executive Director at Keystone Bank Limited, Richard Obire differed, saying it was strange not to have the Vice President on the economic management team.
Former Education Minister, Oby Ezekwesili, said nothing has changed with the dissolution of the old team and the constitution of the Doyin Salami-led EAC.
According to her, the President has always been in charge of the economy.
The Director-General of the LCCI, Muda Yusuf, who hailed the setting up of the EAC, said it will help to give the desired direction to the nation’s economic management. The stature, pedigree and the independence of the members of the council are clearly not in doubt, adding that they are tested technocrats.
He said: “At a time like this, the economy needs such a team to pull the economy back from the brink. The management of the Nigerian Economy needs to be anchored on tested economic principles that will propel sustainable growth and development. The economy craves a critical mass of private sector investment to stem the current slide and declines in the economy. We need to boost the confidence of investors for such private capital flows to happen. The economy desires policies that are coherent, consistent, coordinated, synchronised and transparent”.
He advised that the economy should be managed in such a way to harness the bountiful entrepreneurial energies and resourcefulness of the Nigerian people.
According to him, hard choices are inevitable to ensure that we build an economy that is sustainable, diversified and inclusive. He appealed to the President to give the Advisory Council ample scope, responsibility and authority to provide the much needed guidance and advice on policy choices.
To the MAN, the formation of an EAC was both timely and commendable.
The association said it was by far, a clear demonstration of the determination of Mr. President to re-energise the management of the economy in his second term.
Its Director-General, Segun Ajayi-Kadir, said Nigerians and indeed, the private sector, were highly desirous of an effective and knowledge-driven team that will lead on the economic front.
He said the beauty of this team, apart from their pedigree, was its composition of private sector citizens who “We believe will operate independently and effectively.”
“The team, we believe, will not be shackled with the bureaucracy of government and hopefully, the political interference and correctness of our clime. They are more likely to be receptive to a wide range of opinions and innovations, even if deferring from the norm.”
MAN, therefore, proposed that the team in partnership with the private sector should carry out a critical and comprehensive review of the current policy initiatives that drive the actions of government and urgently harmonize the outcomes.
According to the Association, this will help to craft an agenda that will guide the management of the economy going forward.
“Already on ground are policy initiatives such as the Nigerian Industrial Revolution Plan (NIRP), Economic Recovery and Growth Plan (ERGP), the 2020-2022 Medium Term Fiscal Framework and Fiscal Strategy,” MAN pointed out.
It added that it behoves the Council to recommend pragmatic programmes that will improve upon the achievements already made in some areas such as Ease of Doing Business in the country.
“The EAC is coming on the heels of the promised National Action Committee on African Continental Free Trade Area (AfCFTA). The AfCFTA is unarguably, the most pressing preoccupation of continental economic actors in Africa today.
“The right composition of the Committee will augur well for the needed synergy with the Council to boost our chances of being net gainers in the continental free trade area. We eagerly look forward to this prospect,” MAN said.
The Association also said the fact that the EAC will have monthly technical sessions as well as scheduled quarterly meetings with the President may guarantee the attention of government and implementation of their advice.
“The Organised Private Sector (OPS), particularly MAN, is adequately prepared and eager to engage the Advisory Council in a bid to achieve the desired growth and development of the nation’s economy,” the statement concluded.
Obire said he had never seen a thing like that “in my knowledge about politics where the number two man seems not to count”.
He said: “There is need to treat the number two person with dignity and support. The number two person is the next after the President. If the president is not available, the Vice President takes charge. In this case, the number two person has been cooperative.”
The former bank chief cited a case where a sitting minister was reassigned while she was away meeting with foreign investors, and she immediately resigned her appointment. The former bank director said such practices are not proper and do not promote trust in government.
He said what is happening now, could be a way to clip the wings of political gladiators ahead of the 2023 elections.
On the EAC, he said some members of the team are well known and have deep knowledge of the economy.
“Doyin Salami, Chukwuma Soludo, Bismark Rewane are personally known to me. They have the experience and I am confident that they will do the job well. But remember that their role is advisory and when they advise the President, he may or may not take their advice,” Obire said.
Continuing, he said even where the President takes the EAC advice, the next phase which is implementation goes to the bureaucrats who may not give it the best shot.
Obire said the EAC should focus on subsidy removal, reform of the civil service, decongestion of the ports and unifying the exchange rates.
He said that removal of petrol subsidy and reform of the civil service will save huge funds needed to provide key infrastructure and support the economy.
“We need to make investments in the ports, railways. We need to decongest Lagos ports to reduce cost of operation for companies. All these are areas the team should focus on. Also, exchange rate should be transparent. We do not need exchange rate that gives room for round-tripping.”
Mrs. Ezekwesili said the setting up of council of economic advisors is in itself one of the features of the American Presidential system which we copied.
“Strong membership and that’s really great. I hope the first thing they do is tell the President how he mismanaged the economy in the last four years. For those who will jump on this timeline to say, ‘it was not the President that was in charge of the Economy. It was the VP chairing the Economic Team” please don’t bother. The President was managing the Economy. All those bad Monetary Policy decisions were made by him,” she twitted.
According to her, the President was managing the economy, adding that all those strange Fiscal Policy decisions were made by him.
”Both the CBN Governor and the Minister of Finance were not acting based on any Economic Management Team decisions.
Now at least the pretense is over about Economy,”she twitted.
The Chief Executive Officer (CEO), Sofunix Investment and Communications, Sola Oni, described every member of the team as a game changer, saying that the team’s pre-occupation would be to offer the Federal Government realistic measures to revive an ailing economy.
He said: “The team should come up with appropriate policy framework to align fiscal and monetary policies, especially, where there are disconnects. The members should address the issue of domestic fund mobilisation through measures such as realistic interest rates on domestic savings, wholistic integration of informal activities into formal sector and more efficient banking and insurance sectors.
”The team should also propose strategy for easy access to domestic credits by investors while provision of relevant incentives for domestic and foreign investors should be addressed. The members should conduct impact analysis on Economic Recovery and Growth Plan (ERGP) for enhanced implementation. They need to engage with the capital regulators and operators to identify measures to leverage the capital market to boost economic growth and development,”
The team should reverse the recent increase in Value Added Tax (VAT) without further delay as it will do more harm than good in the present circumstance. In advanced economies, people pay tax with ease because infrastructures are provided to aid economic and entrepreneurial activities. But it is a reverse logic in Nigeria where majority of private sector operators are struggling to survive and purchasing power of consumers is shrinking by the day. The whole situation makes tax issues appear punitive.