How Nigeria Can Survive Recession…Atiku

How Nigeria Can Survive Recession…Atiku

…Wants All Non Essential Items in Budget 2021 Expunged …Stimulus Package of N5000 Monthly Transfers to the Vulnerable …Luxury Tax on Goods, Services Exclusively Accessible Only to the Super-Wealthy Former Vice President, Mr Atiku Abubakar, has proposed expunging all non essential items from Budget 2021, a stimulus package to take care of the vulnerable and

…Wants All Non Essential Items in Budget 2021 Expunged

…Stimulus Package of N5000 Monthly Transfers to the Vulnerable

…Luxury Tax on Goods, Services Exclusively Accessible Only to the Super-Wealthy

Former Vice President, Mr Atiku Abubakar, has proposed expunging all non essential items from Budget 2021, a stimulus package to take care of the vulnerable and the imposition of luxury tax on the super wealthy, as part of survival strategies, as the country recedes into another recession in five years, described as the worst in three decades.

In statement on Sunday, he warns that, “Nigeria neither has the resources, or the need to implement such a luxury heavy budget. The nation is broke, but not broken. However, if we continue to spend lavishly, even when we do not earn commensurately, we would go from being a broke nation, to being a broken nation.”

Lamenting that another recession could have been avoided had the administration of President Muhammed Buhari taken heed to patriotic counsel given by himself and other well meaning Nigerians, he wants the government to cut the cost of governance, save for a rainy day and avoid profligate borrowing.

“It is with a very heavy heart that I received the confirmation that for the second time in five years, Nigeria has entered into another recession. Heaviness of heart, because this could have been avoided had this administration taken heed to patriotic counsel given by myself and other well meaning Nigerians on cutting the cost of governance, saving for a rainy day, and avoiding profligate borrowing,” he says.

Atiku, also presidential candidate of the People’s Democratic Party (PDP) in the 2019 general election, affirms that, “Yes, the COVID-19 pandemic has exacerbated an already bad situation, however, we could have avoided this fate by a disciplined and prudent management of our economy.”

“Be that as it may, it serves no one’s purposes to quarrel after the fact. We must focus on solutions. Nigeria needs critical leadership to guide her back to the path of economic sustainability.

“We cannot afford hand wringing and navel-gazing. We must act now, by taking necessary, and perhaps painful actions,” the former Vice President, counsels.

He argues that the proposed 2021 budget presented to the National Assembly on Tuesday, October 8, 2020, is no longer tenable.”

“As a matter of importance and urgency, every non essential line item in the proposed 2021 budget must be expunged. For the avoidance of doubt, this ought to include estacodes, non emergency travel, feeding, welfare packages, overseas training, new vehicle purchases, office upgrades, non salary allowances, etc.

“Until our economic prospects improve, Nigeria ought to exclusively focus on making budgetary proposals for essential items, which include reasonable wages and salaries, infrastructural projects, and social services (citizenry’s health, and other human development investments), he says.

Atiku, who was Vice President between 1999-2007, advises that, “Additionally, we have to stimulate the economy, by investing in human development, and increasing the purchasing power of the most vulnerable of our population,” adding that, “Only a well developed populace can generate enough economic activity for the nation to exit this recession.”

He also proposes that, “We must invest in those most likely to be impacted by the effects of the recession, the poorest of the poor. As well as stimulating the economy, this also ensures that they do not slip further into extreme poverty.

“For example, a stimulus package, in the form of monthly cash transfers of N5000 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 annual minimum wage.”

“Now, how will this be funded? By more profligate borrowing? No. I propose a luxury tax on goods and services that are exclusively accessible only to the super-wealthy. A tax on the ultra wealthy to protect the extremely poor.

“A practical approach to this is to place a 15% tax on all Business and First Class tickets sold to and from Nigeria, on all luxury car imports and sales, on all private jets imports and service charges, on all jewellery imports and sales, on all designer products imported, produced or sold in Nigeria, and on all other luxury goods either manufactured, or imported into Nigeria, with the exception of goods made for export.

“The proceeds of this tax should be exclusively dedicated to a Poverty Eradication Fund, which must be managed in the same manner as the Tertiary Education Trust Fund, or the Ecological Fund,” Atiku canvasses.

He further proposes that a 1% poverty alleviation tax should be legislated by the National Assembly on the profits of every International Oil Company operating in Nigeria, and international airlines doing business in Nigeria, which should also go towards the proposed Poverty Eradication Fund.

“It is inhumane for us as a nation to increase the cost of goods and services that affect the poor, while keeping the cost of luxuries fairly stable. We must flip this, and flip it immediately.

“And above all, Nigeria must stop borrowing for anything other than essential needs. Again, for the avoidance of doubt, borrowing to pay salaries, or to engage in White Elephant projects, is not an essential need. This is particularly important as we need cash at hand, because the world and our economic and development partners are also focused on helping their home economies overcome the effects of COVID19. We must be our own saviours.

“The more we borrow, the more we will need cash to make interest and principal payments, and the less cash we will have to make necessary investments in our economy and our people. If we keep borrowing, we stand the risk of defaulting, and that will make recession a child’s play, because we will lose some of our sovereignty.

“I urge the administration of President Muhammadu Buhari to swallow its pride, and accept its limitations, so that they can open their minds to ideas, without caring who the messenger is. For as Deng Xiaoping said “It doesn’t matter whether the cat is black or white, so long as it catches mice”,” he says.

Also arguing in the same vein, the Socio-Economic Rights and Accountability Project (SERAP), has sent an open letter to President Buhari urging him “to put the country’s resources at the service of human rights, and to support the less well-off to enjoy an adequate standing of living through cutting the cost of governance and implementing bold transparency and accountability measures in your government’s response to Nigeria’s second recession in five years.”

In the letter dated 21 November, 2020 and signed by SERAP Deputy Director, Mr Kolawole Oluwadare, the organisation said, “This economic crisis provides an opportunity to prioritise access of poor and vulnerable Nigerians to basic socio-economic rights, and to genuinely recommit to the fight against corruption. The country cannot afford getting back to business as usual.”

SERAP said: “Implementing human rights, transparency and accountability measures would save money, address projected adverse human rights impacts of the recession, and fast-track the economic recovery process. It is not too late to take urgent measures that would put the country’s wealth and resources to work for the common good of all Nigerians.”

According to SERAP, “Decades of mismanagement and corruption, and deep-seated deficiencies in public financial management have directly contributed to higher levels of borrowing and public debts, and consequently, the economic recession. Successive governments have squandered the promise afforded by the country’s natural wealth and resources.”

The letter reads in part: “The paltry resources Nigeria invests in essential public goods and services that would benefit ordinary Nigerians can be partly explained by the high spending of public funds to finance a life of luxury for members of the National Assembly, state governors, and other powerful politicians.

“The country’s resources appear to have been used almost exclusively for the benefit of the political elites rather than on projects that would ensure the right to an adequate standard of living, the maximum welfare, prosperity, freedom and happiness of every citizen on the basis of social justice and equality.

“SERAP is seriously concerned about the adverse consequences of the economic crisis on the human rights of poor and vulnerable Nigerians, including denying them access to essential public goods and services such as healthcare, education, clean water, and regular electricity supply.

“We would be grateful if your government begins to implement the recommended action and measures within 14 days of the receipt and/or publication of this letter. If we have not heard from you by then as to the steps being taken in this direction, SERAP shall take all appropriate legal actions to compel your government to implement these recommendations for the sake of human rights, transparency and accountability.

“Nigeria has been poorly governed for many years, with systemic and widespread corruption at all levels of government, contributing to failures by successive governments to deliver essential public goods and services to Nigerians, contrary to the country’s constitution and human rights and anticorruption obligations.

“Huge budgetary allocations to fund security votes, renovate the National Assembly complex, pay jumbo salaries and allowances to members of the National Assembly, and life pensions to former Governors and their deputies, as well as massive corruption in ministries, departments and agencies [MDAs] contribute to low provisions for health, education and other essential public goods and services.

“Prioritising the human rights of poor and vulnerable Nigerians means providing public goods and services free of charge for those who cannot afford them. This is the time to prioritise poor and vulnerable Nigerians, and to ensure that any response to the recession goes well beyond bailing out large companies and banks.

“Our requests are brought in the public interest, and in keeping with the requirements of the Nigerian Constitution 1999 [as amended], and Nigeria’s international obligations, including under the UN Convention against Corruption, and the International Covenant on Economic, Social and Cultural Rights, as well as the UN Guiding principles on human rights impact assessments of economic reforms.

“Your government ought to have taken full advantage of court judgments ordering the full recovery of stolen public funds, recovery of life pensions collected by former Governors and their deputies, and mandating your government to hold to account corrupt electricity contractors and companies that collected billions of naira but disappeared with public funds without executing any projects.

“The continuing failure to enforce these judgments has contributed to increasing level of borrowing, and in the process, the inability to fulfil the country’s anti-corruption and human rights obligations to progressively realize the human rights of poor and vulnerable Nigerians, including their rights to affordable and decent health care, clean water, adequate sanitation, and education.

“As the National Bureau of Statistics stated, the country’s GDP recorded a negative growth of 3.62 per cent in the third quarter of 2020. The country had earlier recorded a 6.10 per cent contraction in the second quarter.

“SERAP therefore urges you to prioritise citizens’ socio-economic rights and undertake comprehensive reform to stem grand corruption including in MDAs, hold corrupt electricity contractors to hold, fully recover all stolen public funds, and life pensions collected by former governors and their deputies, and ensure a transparent and accountable spending of any recovered public funds on projects that will directly benefit poor and vulnerable Nigerians.”

SERAP also urged President Buhari to:

  • Increase investment in public health, the healthcare system, education services, provision of clean water and other basic public goods and services that will benefit majority of the population;
  • Re-direct budgetary allocations to renovate the National Assembly complex and take urgent steps to ensure that essential public goods and services are available to poor and vulnerable Nigerians;
  • Improve transparency and quality of information in government budgets and reform public financial management to bring it in line with international standards, and safeguard the right of media and civil society to speak out against corruption and human rights abuses;
  • Direct the Revenue Mobilization Allocation and Fiscal Commission (RMAFC) to urgently undertake a downward review of remuneration and allowances of all political office holders including President, Vice-President state Governors and their deputies, and members of the National Assembly, consistent with the provisions of paragraph N, 32[c][d] of the Third Schedule, Part 1 of the Nigerian Constitution;
  • Regularly and widely publish full accounts of projected and actual government revenues and expenditures;
  • Immediately instruct the Independent Corrupt Practices and Other Related Offences Commission (ICPC) and Economic and Financial Crimes Commission (EFCC) to jointly investigate allegations of systemic and widespread corruption in MDAs, as documented by the Auditor-General of the Federation, and to ensure effective prosecution of those suspected to be involved, and recovery of any stolen public funds;
  • Ensure independence of the Office of the Auditor-General of the Federation.

Nigeria has officially slipped into a recession after the country’s Gross Domestic Product (GDP) contracted for the second consecutive quarter, just three years after emerging from the economic rubbles of 2017.

According to the Statistician General of the Federation, Dr. Yemi Kale, who announced on Twitter on Saturday, “Q3 2020 Real GDP contracted for second consecutive quarter by -3.62%.” The recession is the worst in over three decades when the GDP shrank by 10.8 percent in 1987. Recall Africa’s largest economy was last in recession in 2016 before exiting it a year after.


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