An Enugu-based non-governmental organization (NGO), Amaka Chiwuike-Uba Foundation (ACUF), says Nigeria’s Economic Sustainability Plan formulated by the Vice President Professor Yemi Osinbajo-led committee is a bold step but not feasible.
The ACUF Board Chairman, Dr Chiwuike Uba, who stated this in a statement on Tuesday, commended the Federal Government for conceptualising a policy response needed to jumpstart Nigeria’s economy after COVID-19 pandemic.
According to Uba, a developmental economist, “The plan is in the right direction; but not feasible as it stands. Many recommendations in the white paper might be difficult to be implemented as “more emphasis was placed on increasing government revenue through borrowing and taxation’’.
He said the plan has less emphasis on reducing costs, wastages and pilferage that have become part of governance in Nigeria.
According to Uba, for the plan to be effective, government must, inter alia, as part of the post-COVID-19 measures, encourage establishment of privately-owned refineries with minority shares by government, even as there are needs for job creation to reduce unemployment.
He said: “The government have recognised the precarious situation of Nigeria’s economy as evidenced in the high unemployment rate of 23.1 per cent (expected to increase to 33.6 per cent at the end of the year 2020].
“Decreasing revenue occasioned by the decline in the demand and price of crude oil, death/closure of businesses, increasing recurrent expenditure, high poverty rate, despondency, and high misery rate and its attendant implications on the security of lives and property.
“While we commend the government for putting together a beautiful document/plan to achieve the stated objectives contained in the plan.
“We observe that more emphasis was placed on increasing government revenue through borrowing and taxation and less emphasis on reducing costs, wastages and pilferage that have become part of governance in Nigeria,’’ he said.
He said that it was expedient to reduce the cost of governance occasioned by wastages, frivolities, pilferages and corruption, adding that as government continues with review of Oronsaye Report, it would be necessary to close down some government agencies as cost-saving measures.
“For instance, following the removal of price capping on fuel, the continuing existence of PPRA would be a huge drain on the economy of Nigeria. The functions of PPRA should be transferred to DPR.
“In addition, Nigeria’s refineries have posted no profit in the last 18 years. The refineries posted a combined loss of N154 billion and N149.23billion in the year 2018 and 2019 respectively. The loss has continued in 2020.
“An asset is expected to generate wealth but our refineries are currently national liabilities.
“The truth is that the cost of fixing the refineries may be enough to install new refineries. Therefore, it is recommended that, as part of the post-COVID-19 measures, privately-owned refineries with minority shares by the government should be encouraged.
“What is the need for keeping loss-making NNPC refineries? Nigeria would experience an improved economic performance through the provision of more jobs, reduction in capital flight, and building of a new set of industries if we build more and have working refineries in Nigeria.
“What is the government’s plan to reduce recurrent expenditure currently hovering around N5trillion and revenue to debt service ratio of over 66 per cent?
“It is more worrisome when the revenue to debt service ratio in the first quarter of the year 2020 is above 80 per cent. This is not sustainable,’’ he said
According to him, ACUF agreed that agriculture “is needed not just to create jobs but to improve the general economy,’’ but we are concerned with the government’s plans for agriculture.
He said that the Federal Government had indicated its intention to ‘create five million jobs’ through agriculture and agro-allied ventures.
“There is a need for everyone to make sacrifices. We cannot continue to increase the public debt to fund consumption and corruption,’’ he said