Professor Yemi Osinbajo Led National Economic Sustainability Plan to REVIVE the Nigerian Economy

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Nigerians!!!!

SMILE

Because

Government is prospecting (if backed by Legislators) to dash out CONDITIONAL GRANTS (Free Money) to employees who work in the Educational, Transport, Tourism, Hospitality, Creative and Aviation Sectors in the BIGGEST or LARGEST ever STIMULUS package the Federal Government (2.3 Trillion Naira) hopes to give its citizens as Nigeria is currently in a recession.

Before we get super excited, we should know that Government is not getting 2.3 Trillion from a FREE place where it keeps MONEY, the bulk of the MONEY will be gotten as LOANS, the money will be sourced from the following sources: 500 billion from Federal Government Special Accounts, 1.11 Trillion Naira structured loan from the Central Bank of Nigeria whilst 302.9 Billion will be loaned from Multilateral Institutions and another 300 Billion Naira plus from external creditors. These external sources includes: International Monetary Fund – $3.4bn; World Bank – $2.5bn; African Development Bank – $0.5bn, African Export-Import Bank – $0.5bn and Islamic Development Bank – $113m.

Now let’s backtrack a little, with this level of necessary borrowing at this time, it is good that Nigerians know that Government is no longer able to even pay the MAIN LOANS it takes, it only services the LOAN via Interest Repayment and that INTEREST repayment equals the total money Government budgets to spend on recurrent and capital expenditure – people of Nigeria, CRY, because our Government in some ways has effectively mortgaged the future finances and future of this Nation (Hypothetically, Let’s say Government spends 50 billion to pay salaries and implement projects, the same 50 billion naira is used to pay back just INTEREST, the main loan of maybe 500 billion naira hasn’t been touched oh and we pay this 50 billion periodically like per annum), we are in DEEP SHIT as a Nation but yet, HOPE beckons as the Government has laid out a comprehensive PLAN that can at the minimum stabilize our economy and enable us get the country from recession, after which, the Government can begin to fathom out ways to earn more DOLLARS so it is able to repay the loans and humongous interest they bear.

To support Nigeria’s recovery from the CORONAVIRUS Pandemic, President Buhari set up an Economic Sustainability Committee headed by the Vice-President, Professor Yemi Osinbajo, I must add at this time that this PLAN is excellently carved out but the major issue is the DELIVERY of the MILESTONES and expected outcomes this plan aims to achieve – the Government has also set up Monitoring and Evaluation Frameworks through its Ministries to ensure that this PLAN achieves its aims and objective if passed as an ACT of PARLIAMENT. The Nigerian Global Affairs Council (NIGAC) will also be monitoring the expected and unintended outcomes of this PLAN when passed into LAW through its POLICY TRACKING Tools.

 

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I will highlight major points of the PLAN before for your REVIEW.

1. Immediate Fiscal Measures (Providing Funds to specific Private Sector MSME’s affected adversely by the pandemic, upgrading the facilities within the Health Sector by providing soft single digits loans for hospitals to upgrade their facilities and equipment, lastly Government intends to embark on massive infrastructure development projects that will employ people, create multiple value chains for local production and more importantly, help Nigerians begin to own assets they can be proud of in years to come)

2. Fiscal Measures to Safeguard Oil Revenues (Deregulating the Oil Sector – the subsidy on OIL has been totally removed)

3. Fiscal Measures to mobilize and preserve Non-Oil revenues (Sustaining its POLICY plan to collect 7.5 VAT from corporate companies, register more tax paying citizens that work with MSME’s, ensure more Government Owned Enterprises are remitting their revenues and borrow 2 trillion naira from our PENSION FUNDS for roads and housing projects

4. Fiscal Measures to Reduce Non-Essential Spending (Adopting a Financing Plan that removes electricity subsidy (The Nigerian Electricity Regulatory Commission released a PRESSER and guideline to increase ELECTRICITY TARRIFS effective from July 1st 2020, expect higher BILLS for electricity) and remove non-critical expenses from our federal government and its MDA’s, we hope Government truly cuts down on non-critical expenses because when you truly study the budget line of our Government, you will be awe of the waste and stealing that goes into their budget preparations in the name of repeated cost.

5. Monetary Policy Measures (Cash Injection into the economy through targeted loans for the manufacturing sector and MSME’s, stabilizing the foreign exchange market, reduction of percentage interest in approved CBN loans, extended moratorium on CBN backed loans and partial guarantees provided to SME’s for targeted loans for small businesses etc.

6. Measures to mobilize external support and funding (Seek more money from abroad and seek debt reliefs on the ones collected) – Monies (Loans) will come through IMF – $3.4bn; World Bank – $2.5bn; AfDB – $0.5bn, African Export-Import Bank – $0.5bn, IsDB – $113m. For a Government that barely cuts its coat according to its size, I wonder how it wants to convince international creditors for debt relief.

7. Measures to Collaborate with and support The States (The idea is to just ensure States pluck into these programmes, there is no critical thought to even challenge Governors to think outside the box on how their states can become self-sufficient based on comparative advantages they enjoy). You would this is a time we practice true FEDERALISM where states begin to look INTERNALLY at the natural resources they enjoy and how they can be harnessed to make their states self-sufficient, when will the 36 state Governors in Nigeria begin to think and truly earn and prove their mettle if they were truly elected? Less than 5 Governors seem t be thinking outside the box.

8. Of course, these measures require Legislative Support – Government need the Legislature to back up this plan with a STIMULUS ACT 2020)

9. Cross Cutting Imperatives for A Post-COVID Economic Recovery (The most important point is that Government is taking the issue of DATA very critical by way of the National Identity Number Registration (it says it will work with Telecom Companies and Banks to drive the process, same idea NIGAC shared some weeks back) and the Government is also taking the issue of broadband Internet penetration seriously bringing internet to cut-off from the World communities and even rural-urban centres)

10. Creating Jobs in the real sectors as follows: Employing 774,000 people in the following sectors specifically targeting youths and women: Agriculture and the entire value chain (and also signing off-taker guarantees to ensure sales and retaining of Jobs), Critical Mass Housing projects to stimulate house ownership, adoption of a Solar energy and fostering its mass deployment (the solar energy sector has a lot of value chains that can also create limitless number of jobs) and making Nigeria a major hub for IT Business Support Services (Like India and China) due to cost effectiveness, if we get our broadband penetration right, we can become the call or IT support centres for global tech companies across the World, this in itself are opportunities to create jobs and generate FOREX for Nigeria)

11. Moving form petrol, Government wants Nigerians to begin to adopt Liquefied Processed GAS for Generator and Car Usage – it wants to do away with fuel for home and vehicle usage. It is very possible and cheaper if Government’s National Gas Expansion Programme is implemented right.

12. Supporting Small Businesses: Guaranteed Offtake Scheme for MSMEs; SME Survival Fund; SME Intervention Funds; MSME Regulatory Support. For hotels, schools, the creative industry, transport and tourism, Government will be giving your company FREE money (CONDITIONAL GRANT) to pay your staff so long you have more than 10 employees and less than 50 Staff. See how the money is appropriated: N50,000,000,000.00 [payroll support], N200,000,000,000.00 [loans to artisans] and N10,000,000,000.00 [support to private transport companies and workers]. Government also guarantees that you have a market for your farm produce, targeted support to MSME’s and lastly, the necessary regulatory framework Government needs to continually adopt to ensure MSME’s survival

13. The Aviation is benefitting greatly through a 27 billion Naira stimulus package – some of it comes as grants for payment of salaries whilst some comes in form of soft single digits loans with very long repayment timeline and many other Stimulus package the government is unveiling for the sector.

Kindly note that this STIMULUS package is different from the 2020 BUDGET the Federal Government has readjusted to suit our REALITIES. This plan might not be all encompassing but it covers every MAJOR facet of our National LIFE and if implemented right, a lot of Nigerians will be smiling economically from the ripple effect this plan will engender. It is our HOPE that POLITICIANS and Senior Public Officials and Civil Servants truly ALLOW this to be EFFECTIVELY AND EFFICIENTLY EXECUTED.

I am rooting for the Government on this ONE.

Kindly share your thoughts to elda@nigac.org

#PublicPolicy #PolicyInsights #PolicyAnalysis #PolicySolutions #COVID19 #EconomicSustainabilityPlan #StimulusPackage #Nigerians

One Comment:

  1. This is a welcome development. Nigerians will really smile again, for we have actually experienced pains as a result of the COVID-19 pandemic.

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