Former Vice President Atiku Abubakar said Sunday that Nigeria must act now, taking the necessary and painful actions, including adjusting the proposed budget for 2021, to emerge from another recession the country has entered.
Abubakar, in a statement issued in Abuja, said that although the COVID-19 pandemic had exacerbated an already bad situation, Nigeria could have prevented the second recession, five years from now, through disciplined and prudent management of the economy.
“Be that as it may, it is no use fighting after the fact.
“We must focus on solutions. Nigeria needs critical leadership to guide it back onto the path of economic sustainability.
“We can’t afford to wring our hands and look at our navels. We must act now, taking necessary and perhaps painful actions. “
Abubakar said that the proposed 2021 budget presented to the National Assembly on October 8 was no longer sustainable to begin with, saying that Nigeria did not have the resources or the need to implement such a luxurious budget.
“The nation is broken, but not broken. However, if we continue to spend generously, even when we do not earn proportionally, we would go from being a bankrupt nation to being a bankrupt nation.
“As a matter of importance and urgency, all non-essential line items in the proposed 2021 budget must be removed.
“For the avoidance of doubt, this should include these codes, non-emergency travel, food, welfare packages, training abroad, buying new vehicles, office improvements, non-salary allowances, etc.
“Until our economic prospects improve, Nigeria should focus exclusively on making budget proposals for essential items, including reasonable wages and salaries, infrastructure projects and social services (citizen health and other investments in human development).”
Abubakar also stressed the need to stimulate the economy by investing in human development and increasing the purchasing power of the most vulnerable in the population.
He said that only a well-developed population could generate enough economic activity to lift the nation out of recession.
“We must invest in those who are most likely to be affected by the effects of the recession, the poorest of the poor.
“In addition to stimulating the economy, this also ensures that they do not fall further into extreme poverty.
“For example, a stimulus package, in the form of monthly cash transfers of ₦ 5,000 to each bank account holder, verified by a Bank Verification Number, whose combined total deposit in 2019 was less than the annual minimum wage. “
He proposed that it could be achieved by a luxury tax on goods and services that were exclusively accessible only to the super-rich.
“A tax on the ultra-rich to protect the extremely poor.
“A practical approach to this is to place a 15 percent tax on all business and first-class tickets sold to and from Nigeria, on all imports and sales of luxury cars, on all imports of private jets and charges. By service.
“Fifteen per cent tax on all jewelry imports and sales, on all imported designer goods, produced or sold in Nigeria, and on all other luxury goods manufactured or imported in Nigeria, with the exception of manufactured goods for export “.
He said that the proceeds of the tax should be dedicated exclusively to a Poverty Eradication Fund, which should be administered in the same way as the Tertiary Education Trust Fund or the Ecological Fund.
Furthermore, I propose that the National Assembly legislate a 1% poverty alleviation tax on the profits of all international oil companies operating in Nigeria and international airlines operating in Nigeria, which should also go to the Eradication Fund. of Poverty proposed.
“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 turn this around and turn it around immediately.”
Abubakar also warned that Nigeria should stop borrowing for anything other than essential needs, saying that borrowing to pay wages or participate in white elephants is not an essential need.
He said the action was particularly important as Nigeria needed cash on hand, because the world and the country’s economic and development partners were also focused on helping their home economies overcome the effects of COVID-19.
“We must be our own saviors.
“The more we borrow, the more cash we will need to pay interest and principal, and the less cash we will have to make the necessary investments in our economy and our people.
“If we continue to borrow, we run the risk of defaulting, and that will make the recession child’s play, because we will lose part of our sovereignty.”
He urged the federal government to open its mind to ideas, “no matter who the messenger is.”