President Buhari

Legal luminary and former President of the Nigerian Bar Association NBA, Dr. Olisa Agbakoba has faulted Federal Government’s 2020 fiscal appropriation of N10.33 trillion, warning that the ‘anemic’ budget which translates to only N50, 000 per person per annum, given the 200 million population, would keep the country in perpetual abysmal poverty, especially given the targeted double digit economic growth.

Recall that President Muhammadu Buhari had Tuesday, presented a budget estimate of N10.33 trillion to the joint session of the National Assembly tagged: ‘Budget of fiscal consolidation’, which the legislature also promised to pass promptly.

In a letter dated October 10, 2019 personally signed by Dr. Agbakoba and addressed to President Buhari, he commended the President for striving to present the budget early enough and returning to the January-December budget cycle, but also observed that there are several fundamental issues to be addressed in the budget proposals.

Dr. Agbakoba

According to him, in a country of about 200 million people and over 50 per cent of them are living in extreme poverty, the budget reflects many missing fundamentals, noting that the starting point with the current budget is to diagnose the country’s economic condition.

He observed that Nigeria is currently afflicted with malignant metabolic economic syndrome complicated by high inflation, high interest rates, mass unemployment, weak infrastructure, slow growth, unclear borrowing policy, unaccountable subsidy, among several other challenges.

Entitled: ‘Kudos for on time budget presentation but missing fundamental remain’ the letter reads in part: “I applaud the unusual departure of the Government of Nigeria by laying the budget estimates in good time and the reciprocity of the National Assembly to pass the estimates in 2019. This is record breaking, but alas, this is only as good as can be said of the budget estimates.

“To turn things around, I like to assume that you have charged the new Economic Advisory Council to give us short and immediate solutions. Working from my diagnosis of Nigeria’s economic disease, we need to work out a macro-economic development framework that lays out a harmonised fiscal, monetary, investment, legal, institutional and regulatory agenda. Fiscal policy or rate, at which government spends, must be dramatically expansionary. We cannot have an anemic budget of N10 trillion for 200 million Nigerians, which is equivalent to N50,000 per person, per annum. This will keep us in poverty abysmal when we need double digit growth.

“On the basis of a Gross Domestic Product GDP of $400 billion, the baseline annual budget should be 20% which approximates 20-30 trillion annual spend rather than the miserly N10 trillion budget. Our annual spending is anemic and we have to infuse large money. For monetary policy, we need urgent quantitative easing, which is easing of all interest rates in particular to slack the heavy burden of high interest rates on lending afflicting long suffering Nigerians. We must be very proactive to look for new funds.

“Traditionally, public revenue has depended on tax and oil receipts but there are far too many other sources- the maritime sector is laden with cash, agriculture and the blue ocean, trade, the real sector, and controversial as it may appear, revenue that can be derived from new legislation on immunity from criminal prosecution. Government must consider legislation on criminal immunity to those who have plundered us, and we will likely see massive inflows of our money in foreign banks back to us. At present, the money is out of our reach anyway. I estimate $100 billion will flow back if we grant immunity from criminal prosecutions but with civil sanctions”.

On the way forward, he also proposed the engagement of the private sector operators in partnerships, which will yield a massive stock of revenue.  Particularly, he noted that the country needs the likes of Aliko Dangotes, Jim Ovia, Mike Adenugas, Innosons Motors-boss to be involved, just like the Chaebols of South Korea.

 “I know that the Onitsha, Nnewi and Ogidi market axis can generate up to N10trillion if the proper incentives are offered.

“Foreign and domestic investments in infrastructure are possible if the proper legal, institutional and regulatory environment is established. Public revenue will be enhanced by a minimum of N3 trillion if we rebase foreign exchange rates from N305 to N360 and remove fuel subsidy at once.

“Additionally, we must review public expenditure. Far too much money is consumed by recurrent receipts. Downsizing government is a task that needs immediate attention by implementation of the Oronsaye report. Our public sector borrowing requirement needs review so that our revenue to debt ratio is less than 30 per cent. Banks must focus on their primary function of lending not trading as we have seen in purchase of Treasury Bills in excess of N400 billion. Tax collection efficiency and not increase should be the policy and chairman of the Federal Inland Revenue Service FIRS, Mr. Babatunde Fowler and Governor of the Central Bank of Nigeria CBN, Mr. Godwin Emefiele are two public servants deserving special mention for their innovation”, Agbakoba also said.

The human rights lawyer insists that as an expert in shipping and hydrocarbons, he queries why government only sees dollars from a barrel of crude when the value chain has at least 34 soft and hard by-products other than crude oil.

He said: “In my field, there is banking, shipping, legal and insurance, but very little of the cash from this value chain from crude oil stays in our economy. We need to reset the clock. I will assume that that the budget estimates is just the start of a turnaround process of economic transformation. “Having held their meeting with you, can the Economic Advisory Council give us a short turnaround plan to create jobs, opportunities and double digit growth? A good plan can create 10 million jobs annually, open the economy, expand local production and put the economy into double digits and pull millions out of poverty in addition to good education and healthcare”