The National Economic Council (NEC) has expressed support for the plans and proposals of the federal government to steer the country out of recession.
Rising on Thursday from its monthly meeting held at the Presidential Villa, over which Vice-President Yemi Osinbajo presided, the council acknowledged the current economic challenges and difficulties bedevilling the country.
Members of the council also endorsed the work of President Muhammadu Buhari’s Economic Management Team (EMT) and specifically commended the Finance Minister, Mrs. Kemi Adeosun, and the Budget and National Planning Minister, Senator Udoma Udo Udoma.
The endorsement came after Deputy Senate President Ike Ekweremadu and some senators called for the redeployment of both ministers over the economic crisis.
The vice-president is the chairman of the council, which advises the president on the economic affairs of the federation and in particular on measures necessary for the coordination of the economic planning in the country.
NEC is composed of governors of all 36 states of the federation, and the Central Bank of Nigeria (CBN) governor.
At the end of the meeting, the governors of Jigawa and Oyo States and Ogun State deputy governor, Atiku Bagudu, Abiola Ajimobi and Mrs. Yetunde Onanuga, briefed the press.
Bagudu, who spoke first, said Adeosun and Udoma briefed the council on the state of the economy.
According to him, the council was informed that the country was in recession and that it was caused by the over-dependence on oil and the fall in the price of the commodity.
He said council was told that the recession provided the country with an opportunity to restructure and reset the economy, adding that it was also briefed on measures being introduced to resuscitate the economy.
He listed the measures as: plans to generate and inject more funds into the economy through assets sales advance payment of licence renewals infrastructure concessions, use of recovered looted funds, etc, to reduce the funding gap; implementation of fiscal stimulus/budget priorities; fast tracking procedures through legislation and implementation of the Strategic Implementation Plan (SIP) of the budget; meaningful diversification of the economy; and cutting down on importation.
Bagudu said council members, in response, commended the EMT, welcomed the presentation and expressed support for the plan to steer the nation out of the recession.
He said: “Under any other business, council members expressed confidence in and unanimously commended the EMT and both the Budget and National Planning and Finance Ministers for the presentations to the council, praising their efforts, competence and capabilities.”
Ajimobi said the Draft Regulations on the Land Use Act was presented to the council by the Presidential Technical Committee on Land Reform (PTCLR), adding that the law “seeks to make provisions to streamline mortgage transactions and clearly delineate the rights, duties and obligations of mortgage borrowers”.
He said the draft contained conditions for the disposal of proceeds of sale and subsequent mortgages and implied terms of a mortgage, rights of redemption, remedies and issues on mortgages by companies, power of assignment by mortgage, and the right of transfer and application of insurance money by the receiver.
Ajimobi added that the finance minister presented the council with public private partnership (PPP) initiatives on affordable housing.
Under the initiatives, Ajimobi said government would target a N1 billion fund to operate the scheme (N500 billion initially) in order to create a blended pool of long-term funds to intervene in housing development finance and mortgage provision.
According to him, the funds aim to deliver family housing priced from as low as N2.5 million up to N18 million in ready-to-occupy conditions with essential services (water and power connected).
He said about 400,000 to 500,000 housing units would be delivered on a yearly basis under the scheme.
“The ultimate aim of the programme is to channel funds from savers to borrowers, so that builders have the required capital to construct and prospective buyers can access credit to purchase.
“The fund will attract low cost local and international capital, including from domestic pension and insurance funds, federal government funding, as well as contributions from state governments and other agencies,” he explained.
The Oyo governor added that states had roles to play in the implementation of the new housing schemes. States, he said, would designate a liaison with whom the Family Homes Fund could interface.
They are also expected to expedite building plan approval processes and security of land titles and also invest in enabling infrastructure, he said.
The Ogun State deputy governor said Adeosun reported to council that the balance in the Excess Crude Account was $2.453 billion as of September 20, 2016.
Onanuga said the CBN Governor, Mr. Godwin Emefiele, presented to the council the best options for managing the floating foreign exchange policy introduced by the central bank.
Under the policy, she said CBN introduced a cautious monetary policy stance as dictated by consumer prices and the exchange rate.
She said the CBN would also maintain policy tightening measures for the flexible forex rate to address persistent pressures occasioned by FX scarcity and speculative demand.
“The presentation also noted that controlling inflation is key to stabilising other macroeconomic indices and the current monetary policy stance is expected to continue to help lock-in inflationary expectations,” she added.
The deputy governor also revealed that the finance minister reported to council that N50 billion had so far been disbursed to state governments under the Budget Support Loan Facility.
Senators Slam Buhari’s Rigidity
But as the council endorsed the competence of Adeosun and Udoma and the federal government’s handling of the economy, the Senate yesterday continued its debate on the economic downturn, with some senators deploring the technique deployed by the Buhari administration in its fight against corruption, describing it as counter-productive.
According to them, the anti-corruption approach was crude and scary, as they recalled how potential investors had been scared away following unjustifiable arrests and unlawful detentions of anyone found with money irrespective of the source.
In the opinion of Senator Ben Murray-Bruce (Bayelsa East), the style of the Economic and Financial Crimes Commission (EFCC) in the fight against corruption was wrong and counter-productive because it scares away people who want to invest in the country.
The aftermath effect of this, he added, was the current economic recession which he said had brought the nation to its knees.
“Buhari’s approach to anti-corruption is wrong. Let us forget the foreign investors. What about the local investors? Nobody is investing anything anymore because nobody is buying anything.
“Everybody is terrified to spend money. If people are afraid, they will not invest. Fear will not be a policy to grow the economy.
“Money is a coward. It only goes to places where there is peace and tranquillity… A friend paid a legitimate N50 million into his account and EFCC came and picked him up – a legitimate transaction.
“We cannot be afraid to be Nigerians. We cannot be afraid to live in our country. Obasanjo fought corruption and got some money back but nobody was terrified. I support Buhari’s policy but let us change the approach.
“If we do not want to invest in our country, foreigners will not invest in our country,” Murray-Bruce said.
Aligning with Murray-Bruce, Senator Isa Misau (Bauchi Central) said abuse of the rule of law, which has manifested in the unlawful arrest and detention of individuals by EFCC, was not healthy for the economy, insisting that the recession was self-inflicted.
But for abuse of procedure, Misau insisted, the recession would have been largely avoided, claiming that there are at least five people who constitute a cog in the wheel of this nation’s progress.
“This recession is man-made. One person can spoil a government. I know five people who are not supposed to be in this government. If you remove them, this government will be okay,” Misau said.
Also speaking, the Chief Whip, Senator Olusola Adeyeye, identified the high estacode accruable to government officials as one of the drains on the nation’s economy.
According to him, Nigeria’s estacode is the highest in the world, recalling how the late Chief Obafemi Awolowo promised to slash the estacode in the system when he was campaigning for the presidency in 1978.
Adeyeye added that the estacode today is five times higher than what Awolowo had considered to be high at the time.
He also called for a review of the exclusive and concurrent lists in the 1999 Constitution, observing that if the economy must be rejuvenated, measures must be taken to ensure that projects are executed in every part of the country.
He also called for the restructuring of the country in a way that states would no longer come to Abuja to collect money and accused some of his colleagues who own houses in high brow areas in Abuja of not paying their tenement rates, thus being part and parcel of the problem bedevilling the nation.
“I want us in this current constitution review to look at the exclusive and concurrent lists. Let us look at where we have over-burdened the federal government. Everybody wants something from the federal government.
“If we must revitalise the economy, we must have jobs and projects in every local government, every federal constituency, every senatorial district of this country.
“Let’s begin to implement the zonal intervention projects. If we must save Nigeria, we must reduce the cost of governance. Nigeria’s estacode is the highest in the world. We must slash it to 50 per cent.
“Obafemi Awolowo campaigned in 1978 that he was going to slash it and it is now five times higher than what it was in those days. We must slash it. When you go to our airports and you park your car, you pay N300, that is 75 cents.
“In all modern economies, you pay per hour. If we are going to find money, we must become creative. All of you with houses in Asokoro, Maitama and Apo don’t pay tenement rates. You are part of the problem.
“We should restructure the nation and the states should not be coming to Abuja to collect money,” Adeyeye said.
In his submission, Senator Sunny Ogbuoji (Ebonyi South) called for a thorough execution of the principles of federalism in a way that would discourage states’ reliance on the centre for money.
He also advocated the restructuring of the nation and recalled how some notable individuals in the current government frustrated efforts by the immediate past government to save money.
He also kicked against calls for the sale of the nation’s assets and questioned the effects of past sales on the economy, pointing out that what should be of uppermost priority to all was how to rid the nation of acute corruption.
“We must start true federalism. We cannot allow the states to continue to come to Abuja, as this is part of the problem. We should restructure the nation and the states should not be coming to Abuja to collect funds.
“When the last administration wanted to save money, many of the people who kicked against it are now part of this present administration. Restructuring doesn’t mean disintegrating but just to help every state to tap their potential and this will help Nigeria too.
“Nigeria should be allowed to float sound monetary policies. Floating the naira would make it impossible for people to get waivers to buy dollars at N197 when it is higher in the open market.
“Those who are canvassing that we should sell our assets are getting it wrong. We have sold some of them, yet we are still here. If we do not cure the systemic corruption, we would not get anywhere and we should not be portrayed as thieves.
“Corruption is not peculiar to Nigeria. In fact, it was imported into Nigeria. There is corruption everywhere in the world. They only manage their corruption,” Ogbuoji said.
On the other hand, Senator Solomon Adeola (Lagos West) said the nation might further slip into economic depression if urgent measures are not taken to turn around the economy.
He suggested the need for the federal government to present to the legislature the policies it has designed to bring Nigeria out of the recession, noting that a misalignment between the monetary and fiscal policies from the CBN and the Ministry of Finance was not healthy for the nation.
Adeola further noted that with a minimum wage of N18,000 and the exchange rate at N420.00 to $1, the degree of starvation in the land could not be over-emphasised.
But the senator supported the sale of some of the nation’s assets in order to raise funds, especially those that have become moribund such as the refineries but continue to consume the resources of the country.
He added: “Our economy should be private sector-driven. As it is, it is predominantly public sector-driven as reflected in the outcome of the TSA policy which is giving the banking sector major challenges and by extension, the private sector. I suggest the CBN assists the banking sector through a debt buy back of some bad loans of the commercial banks so that the banks can be free to boost private sector financing.”
Senator Ahmad Lawan (Yobe North), on the other hand, called for business incentives such as tax reliefs for potential investors as is applicable in other countries in similar situations and advocated the need for the Committees on Finance and Appropriation to engage the Ministers of Finance, Budget and National Planning, and Trade and Investment in a roundtable conference with a view to ascertaining what they have in stock requiring further legislative input.
However, more senators kicked against the advocacy for the sale of the nation’s assets. Notable among them were Senators Ovie Omo-Agege (Delta Central), Andy Uba (Anambra South) and Adamu Abdullahi (Nasarawa West).
While Omo-Agege described the call as misplaced, arguing that if selling the assets would offer solutions to the recession, what would the nation sell if the nation finds itself in another recession in the future? His position was backed by Uba.
But Adamu, without mincing words, said: “I will not join the team of leaders who call for the sale of our assets to solve national problems.”
At the end of yesterday’s debate, which wound up at 4.30 p.m., Senate President Bukola Saraki constituted a six-man committee to collate all the recommendations made by the senators and come up with a uniform position to be adopted by the Senate for onward presentation to the executive.
House Endorses Cabinet Shake-up
Following in the path of the Senate, the House of Representatives also suspended all other businesses at plenary yesterday to discuss the state of the economy and proffer solutions to urgently reverse the situation and put the nation on the path to recovery.
It also resolved to set up a committee to liaise with the Senate to invite the president to address a joint session of the legislature to brief it on the economic blueprint intended to rescue the nation from the economic doldrums.
The lawmakers unanimously agreed on the need for the federal government to revisit and reconsider the implementation of certain key economic policies and the composition of a much more competent economic team.
Some of them called for the re-jigging of the current Economic Management Team, particularly for the removal or redeployment of Adeosun and Emefiele.
Adeosun and Emefiele, several lawmakers opined, had not shown competence in handling the nation’s economy and have continued to implement “trial and error” policies.
Minority Leader, Leo Ogor called on the government to revisit the TSA, acknowledging that it was a “beautiful concept”, but had done more harm than good to the economy.
He also identified the inconsistent foreign exchange policies of the CBN, which he said have continued to contribute to the wide disparity between the exchange rate at the interbank and parallel markets, leading to round tripping.
“Our government came out with a policy that you cannot deposit or withdraw money from domiciliary accounts. This caused panic, people shored up the dollar, creating a huge gap… Then we unconsciously devalued our currency,” Ogor lamented.
Ogor however noted that a quick way out of the current economic fix was to divest the federal government of some its powers with regard to the control of mineral resources and transfer such powers to the state governments to harness the exploration of solid minerals in the states.
“The constitution places all mineral resources in the federal government and this has created a situation where states just get to share money from the centre and go back home. We have paid lip service to diversification,” he said, adding that the potential of bitumen and uranium exploration as sources of revenue continue to lie unharnessed due to the absence of real interest and specialisation.
The minority leader also counselled the president against “de-marketing” the country to foreign inventors with his utterances while on trips abroad.
Hon. Oluwole Oke (Osun PDP) echoed the minority leader’s sentiment, saying that policy somersaults had not helped matters, in addition to the fact that Adeosun and Emefiele do not seem to be on the same page on key issues.
“We need a combination of fiscal policy management and political solutions to this recession,” he said.
Oke observed that the recession stemmed from inadequate revenue from crude oil sales and partly due to the crises in the Niger Delta, adding that political solutions must be explored to resolve the crisis in the oil-rich region and boost revenue from oil sales.
Hon. Obinna Chidoka (Anambra PDP) called for the replacement, redeployment or sack of ministers whose performances, he said, had not inspired any confidence in the economy.
In the same manner, Hon. Karimi Sunday (Kogi PDP) described the managers of the economy as confused.
“Those managing our economy are confused. They are doing trial and error. Without wasting too much time, our government needs to rejig our economy,” he said.
He also accused the commercial banks of engaging in round tripping through the FX policy.
Hon. Nkeiruka Onyejeocha however called for a declaration of a state of emergency in the aviation sector, saying the sector had been engulfed by the economic crisis.
She recalled that several foreign airlines had pulled out of Nigeria, while domestic airlines continue to struggle to survive in the harsh economic climate.
Onyejeocha also disagreed with calls for the sale of federal government assets, noting that the planned concession of four airports posed significant threats to the nation’s economy because they were built with loans.