By Dr. Jerry Ugokwe, Co-ordinator, NALF
RESOLUTIONS OF THE NATIONAL ASSEMBLY LEGISLATORS FORUM ON COVID-19 AND THE NIGERIAN ECONOMY
The National Assembly Legislators Forum has deliberated on the impact of the Coronavirus on the Nigerian economy and society and resolved as follows:
1) Covid-19 poses a serious existential threat to the country and the economy and there is an urgent need for a serious intervention by all layers of Government to address it with a view to overcoming it and minimize its impact on the population, productivity and GDP growth.
2) The Group welcomes and endorses all measures so far taken by the FG as contained in Mr. President’s nationwide broadcast and urges Governors to take similar steps in their respective States according to the dictates of the law with a view to achieving coordinated response and synergy between FG and States.
3) That in responding to the covid-19 pandemic, we may implement plans for the short, medium and long terms. In the short term, Governments, at all levels are urged to vigorously sensitize the populace on the reality and dangers of covid-19 disease and mobilize them on adopting appropriate measures of personal hygiene, social distancing and stay-at-home. Members of the organized private sector are urged to continue to support government efforts not only in the donations they have started, which are highly commendable, but with regards to mass sensitization and mobilization of the populace through financing of jingles and advertisements on print, electronic and social media.
4) A massive investment is required in the production of health equipment. There is an urgent need to source materials locally to produce Personal Protective Equipment (PPE), masks and lots more from our local firms/entrepreneurs in Aba and other parts of the country. A portion of these massive donations by the Private Sector Coalition Against Covid-19 should be deployed immediately to local production of the required health equipment, another way of jump starting the economy.
5) There should be a holistic review of the 2020 National Budget based on realistic assumptions and estimates. In particular, drastic reduction of recurrent expenditure in the range of 40-75% should be considered.
6) A moratorium on external and domestic debt repayment should be negotiated. We commend the move by WB/IMF to obtain debt payment relief of bilateral loans for Nigeria and 75 other nations from the G20 countries. This will involve suspension of debt payment from International Development Association (IDA) countries that request forbearance. Equally commendable is the call by African finance ministers for an economic stimulus package $100bn from western creditor-nations, with a waiver of $44bn interests on debts in 2020 and further extension to the medium term if necessary. Approval of these requests will obviously ease the fiscal crisis and provide liquidity to governments in their efforts to tackle the pandemic.
7) The urgent and compelling need to combat COVID-19 requires that government should increase spending in the health sector as well as ensure its transparent management and accountability.
8) Monetary policy should aim at a single digit interest rate on lending by commercial banks to the real sectors of the economy. The deposit money banks should take a cue from the Central bank of Nigeria which has cut rates from 9 to 5 percent. The existing wide spread between lending and deposit rates is inimical to economic growth and prosperity.
9) As part of palliative measures, the CBN has granted moratorium on all its intervention facilities. It is our expectation that the gesture will be extended to states that have begun repayment of the bailout facility earlier provided.
10) Government should promulgate policies that would guarantee household liquidity in the short to medium term so that aggregate demand for goods and services is not unduly jeopardized. To this end, the impressive Government Social Investment Programme, particularly the cash transfer to the poor may have to be enhanced in terms of coverage and amount payable.
11) With regard to medium term measures, the forum is of the view that now is the auspicious moment to fully deregulate the downstream petroleum sector and do away with all fuel subsidies.
12) The forum supports the clarion call to abolish multiple exchange rates. A uniform exchange rate or a managed floating of the exchange rate should tackle the problem of foreign exchange speculation, increase foreign exchange inflows and raise government revenue.
(13) Government needs to ensure that there is no retrenchment of employees and that there is prompt payment of workers salaries in both the public and private sectors.
(14) The Forum urges the Government to extend additional financial support to Micro, Small and Medium Enterprises (MSMEs) in order to avoid bankruptcy which may result in layoffs.
(15) The Federal Government and its institutions such as the Central Bank of Nigeria should support the financial system to avoid the health crisis becoming a financial crisis.
(16) It is advisable for the Federal Government to levy very high custom duties to discourage unnecessary importation of luxury goods.
17) It is more than ever imperative to diversify the economy away from undue dependence on crude oil exports for government revenues and foreign exchange earnings. There is need to give support to the growth sectors of the economy such as agriculture, manufacturing and mining as well as ICT, hospitality, and the entertainment industry so as to boost employment and economic growth.
18) In view of the current level of indebtedness of Nigeria, future borrowing should target concessionary facilities like the buoyant Sovereign Wealth Fund (SWF) of some oil-rich gulf Arab countries as well as an emergency loan from the International Monetary Fund (IMF).
19) All tiers of government, especially the states, should evolve fiscal measures especially in more effective tax administration as well as sale of assets, shares and investments that would ensure robust internally generated revenue for their sustenance.
20) Given the dwindling government revenues, the country should refocus on Public-Private-Partnership (PPP) and concessions in the execution of highways, railways and other viable infrastructure projects.
21) The National Assembly is advised to enact and re-enact legislation on Excess Crude Account and Sovereign Wealth Fund respectively that will ensure funds saved in the future can only be accessed by all tiers of government in times of distress, with the concurrent approval of the Legislature through appropriation.
22) In the long run, there will be need to adequately fund the health care sector in a way that will make public hospitals as well as agencies like PHCDA, NCDC and NHIS meet with the increasing health challenges in the land. Also, the country should endeavor to attain the target of 15% of the budget for the health sector. Furthermore, wealthy entrepreneurs should be encouraged to fund scientific research in our universities in the area of manufacture of health equipment such as PPE, Sanitizers and ventilators. In this regard, the pioneer efforts of Bayero University Kano and University of Benin deserve such support.
23. Finally, Government should evolve a policy of Targeted Sector Growth which will accord great priority to such sectors as Agriculture, Manufacturing, Solid Minerals and Construction that have enormous potential for reducing unemployment and increasing GDP.