A nonprofit making organization, Civil Society Legislative Advocacy Centre, CISLAC, yesterday, tasked the incoming government on revamping the manufacturing sector, agribusiness, drastic reduction on on borrowings, implementation of the Petroleum Industry Act, PIA, and other issues that would put Nigeria’s development on the right and fast track.
The Executive Director, CISLAC, Auwal Ibrahim Rafsanjani who also is the Chairman, Transparency International, TI, Nigeria, made the call at the 2023 ongoing Spring Meetings of the World Bank and the International Monetary Fund, IMF, in Washington DC, USA, while speaking on economic crisis in Nigeria and agenda setting for the incoming administration.
According to him, in revitalizing the economy, the incoming government needs to demonstrate the political will to at least ensure the transparent and accountable implementation of strategic and sustainable developmental policies.
He further stated that the Nigerian economy must at least grow at seven to eight per cent annually for five to 10 years based on an investment-led strategy to avoid the possibility of multi-dimensional poverty, debt, and insecurity consuming Nigerians in the next decade.
He pointed out that over the last 10 years, Nigeria has spent over N10 trillion on fuel subsidies alone, while she has expended about N15.5 trillion on Capital Expenditure, N2.5 trillion on Health, and about N3.9 trillion on Education.
Quoting the National Multidimensional Poverty Index report the National Bureau of Statistics, NBS, he said that 63 per cent of Nigerians were poor due to inaccessibility to health, education, living standards, employment, and security.
The 133 million poor Nigerians recorded by the NBS, exceeded the World Bank’s projection for Nigeria in 2022, hence the incoming government needs to sustain strategic policies with the potential of driving economic growth and development.
He said: “Moving forward, deliberate efforts must be made to avert them is placement of priorities and reverse some of the current policies and sustain and effectively implement new ones.
“All leakages associated with Government revenue must be blocked (oil theft, skewed concessions, fuel subsidy, etc.), and a wholesome review of the Tax administration to make it more equitable and investor friendly.
“The nation seems to be behind in all economic growth fundamentals, except a large market, which if not harnessed might become a curse as the implementation of the Africa Continental Free Trade Area (AfCFTA) agreement swings gains more steam.
“To satisfactorily finance development, the incoming government must focus on debt sustainability, maximising revenue generation from oil and non-oil resources through fair, transparent, equitable and progressive taxes and complementary policies, and reduce leakages and wastes through strong transparency and accountability mechanisms and a reduction in the cost of governance.
The latter can be largely achieved by the implementation of the recommendations of the Oronsaye Report.
“To encourage long-term development, the government should also ensure that borrowing is done on conditions that are consistent with entrenching debt sustainability and that borrowed funds are wisely invested in the economy’s value-added sectors.
“There is also a need for Nigeria to operate an efficient tax administration that would ensure greater compliance to remittances devoid of all forms of evasions in the system to tackle revenue challenges.
“Incessant increases of taxes are probably because of revenue shortfall, but it is detrimental to the economy. There is a need for the incoming government to restructure the tax system, enlarge the tax base, eliminate harmful tax expenditures (waivers, reduced rates, special deductions, and tax credits).
“Boost Government revenue generation and improve inter-temporal budget constraints: poor revenue generation has been identified as a major driver of debt accumulation and therefore there’s a need to improve revenue generation through taxes.
“All over the world taxes have been acknowledged as the most sustainable sources of government revenue, so the Nigerian government must see and explore progressive taxation as a means of boosting revenue and ensuring current and future tax revenues can meet the current and future government’s people-cantered expenditure.
“The incoming government should prioritise engagement and enlightenment of taxpayers to educate them on their obligations; adoption of special tax drives and campaigns; aggressive anti-corruption policies and implementation; creating incentives to increase exports.
“Reduce reliance on borrowings from the international capital market or commercial loans. There is a need to strictly adhere to the provision of the law on maintaining concessional loans as this pose limited debt risk and incorporate a mechanism to work out effective restructuring and negotiate debt relief initiatives which are quite impossible with commercial creditors. Private creditors’ loans are expensive for a nation such as Nigeria that struggles with revenue generation and as such this frontier of borrowing should be discouraged.
“Strengthen the Foreign Exchange Policy to reduce the impact of volatility on loan repayment and thereby reduce the public debt burden that arises from local currency devaluation.
“Improve public borrowing transparency and accountability. The need for public debt transparency is born out of the imminent danger of public debt crisis as brought to the fore by the high sovereign debt figure and the roles of private creditors in the scheme of things. Public disclosure of critical information such as terms and conditions of loans, particularly those of private creditors will help the country stay alert to any hidden danger in exploring such loan frontiers. The Debt Management Office should include on its website sectors where loan terms and conditions can be proactively published including names and details of bondholders.
“Establish an independent committee that comprises Civil Society representatives, the Auditor General Office, the Ministry of Finance, and the DMO to carry out an independent review of all future loan requests with the view to determine their variability and importance.
“Adhere strictly to regulatory and legal frameworks such as the Fiscal Responsibility Act (FRA) 2007, which provides a framework for prudent spending that does not justify taking loans for recurrent costs, subsidies and poorly designed or inflated capital expenditures to ensure that borrowing entities stay in single digit rates, following variable considerations.
“Effective implementation of the Petroleum Industry Act, including its provisions for the removal of subsidies and the implementation of open data reforms like beneficial ownership transparency and contract transparency requirements; and the rehabilitation of oil refineries to boost local refining capacity towards meeting self-sufficiency. Accurate accounting of production in the sector is critical in view of its economic significance as the country’s major foreign exchange earner.
“Drive investment in the agricultural sector to increase productivity to meet local demand and ensure food security, while supporting product standardization for export-value addition.
“Advance efforts in implementation of AfCFTA to ensure that Nigeria is advantageously positioned to reap its substantial benefits to enhance the country’s productivity and competitiveness.”
He (Rafsanjani) also counseled the incoming government on addressing infrastructure gap by creating an enabling environment for private-sector-led infrastructure development; Implementation of reforms to deepen economic and export diversification, focusing on manufacturing, starting with improving the business climate and macroeconomic stability; and strengthening the ease of doing business and block leakages for corruption.
“We call on Nigerians locally and in diaspora, as well as well-meaning members of the international community, to join their voices in calling on the incoming government for sincerity of purpose in the prioritization of planning, formulation and implementation of policies and programmes that would drive inclusive and sustainable growth and development for Nigeria, Africa, and the World by extension”, he added.
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