Atiku Abubakar
Former Vice President Atiku Abubakar on Sunday reported that Nigeria must act now, by taking necessary, and debilitating actions including adjustment to the proposed 2021 budget, to depart another downturn the country has entered.
Abubakar in a statement he issued in Abuja, said that although the COVID-19 pandemic had exacerbated an already bad situation, Nigeria might have avoided the next recession, within five decades, by disciplined and prudent management of the market.
“Be that as it may, it serves no one’s purposes to quarrel after the fact.
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“We must focus on solutions. Nigeria needs critical leadership to direct her back to the path of economic sustainability.
“We can’t afford hand wringing and navel-gazing. We have to act now, by taking necessary, and perhaps painful actions.”
Abubakar said that for a start, the proposed 2021 budget introduced to the National Assembly on Oct. 8, was no longer tenable, stating Nigeria neither had the resources nor the requirement to implement such a luxury funding.
“The nation is broke, but not broken. But if we continue to spend lavishly, even if we don’t earn commensurately, we would go from being a broke nation to being a broken state.
“As a matter of significance and urgency, every non-essential line item from the proposed 2021 budget has to be expunged.
“For the avoidance of doubt, this should include estacodes, nonemergency traveling, feeding, welfare packages, overseas training, new vehicle purchases, office updates, non-salary allowances, etc..
“Until our economic prospects improve, Nigeria should exclusively focus on making budgetary proposals for essential items, including reasonable wages and salaries, infrastructural projects, and social services (citizenry’s health, and other human growth investments).”
Abubakar also stressed the need to stimulate the market, by investing in human growth and increasing the buying power of the most vulnerable of the population.
He explained that just a well-developed populace could generate enough economic activity for the country to leave the recession.
“We have to invest in those most likely to be affected by the effects of the recession, the poorest of the poor.
“Along with stimulating the market, this also ensures that they don’t slip further into poverty.
“For example, a stimulus package, in the form of monthly cash transfers of ₦5,000 to be made to every bank account holder, verified by a Bank Verification Number, whose combined total deposit in the year 2019 was lower than the yearly minimum wage.”
He proposed that it could be achieved through a luxury tax on goods and services which were exclusively accessible only to the super-wealthy.
“A tax upon the ultra-wealthy to protect the extremely poor.
“A practical approach for this is to set a 15 percent tax, on all business and first-class tickets sold to and from Nigeria, on all luxury car imports and sales, on all personal jets imports and service fees.
“Fifteen percent tax on all jewellery imports and sales, on all designer goods imported, produced or sold in Nigeria, and on the rest of the luxury goods either manufactured or imported into Nigeria, with the exception of goods made for export.”
He explained that the proceeds of the tax should be exclusively dedicated to a Poverty Eradication Fund, which has to be handled in the exact same fashion as the Tertiary Education Trust Fund, or the Ecological Fund.
“I further suggest that a one percent poverty alleviation tax ought to be legislated by the National Assembly on the profits of every international oil company operating in Nigeria, and worldwide airlines doing business in Nigeria, which should also go towards the proposed Poverty Eradication Fund.
“It is inhumane for us as a country to increase the expense of goods and services which impact the poor, while keeping the cost of luxuries rather stable.
“We have to flip this, and turn it immediately.”
Abubakar also advised that Nigeria must stop borrowing for anything aside from essential needs, stating borrowing to pay salaries or to take part in white elephants wasn’t an essential need.
He explained that the action was especially important as Nigeria needed money at hand because the world and the nation’s economic and development partners were also focused on helping their home savings overcome the consequences of COVID-19.
“We have to be our own saviours.
“The more we borrow, the more we will need money to generate interest and principal payments, and the less money we will have to make necessary investments in our economy and our people.
“If we keep borrowing, we stand the chance of defaulting, and that will make the recession a child’s play because we will lose some of our sovereignty.”
He urged the federal government to open its mind to ideas,”without caring who the messenger is”.
Vanguard News Nigeria
