On Sunday, former Vice President Atiku Abubakar lamented that President Muhammadu Buhari did not heed his advice, which ultimately led the nation into another recession, even as he suggested ways out.
According to the Nigerian Bureau of Statistics, Nigeria fell into a second recession on Saturday in 5 years.
Atiku, however said it was with a very heavy heart that he obtained confirmation that Nigeria had entered another recession for the second time in five years.
“Heaviness of heart, for this might have been avoided if this government had taken heed of myself and other well-meaning Nigerians’ patriotic advice on reducing the cost of governance, saving for a rainy day and avoiding profligate borrowing.
“Yes, the COVID19 pandemic has worsened the already bad situation, but by disciplined and prudent management of our economy, we could have avoided this fate,” he declared.
He said that the Buhari administration must now act by taking the required, and perhaps painful, acts.
Atiku claimed that the proposed 2021 budget submitted to the National Assembly on Tuesday, 8 October 2020, for a start, is no longer sustainable because Nigeria does not have the money or the need to enforce such a heavy luxury budget.
Broken, but not broken, is the nation. If however, we continue to spend lavishly, we would go from being a broken nation to being a broken nation even if we do not earn commensurately.
Every non-essential line item in the proposed 2021 budget must be expunged as a matter of priority and urgency.’ Estacodes, non-emergency travel, feeding, welfare packages, overseas training, new car purchases, workplace renovations, non-wage allowances, etc should be removed.
Until our economic prospects improve, Nigeria should concentrate solely on making budgetary proposals on essential items, including reasonable wages and salaries, infrastructure projects and social services (health and other investments in human development).
In addition, by investing in human development and increasing the purchasing power of the most vulnerable among our population, we need to stimulate the economy. Only a well-developed population will generate sufficient economic activity to exit this recession for the nation,” he said.
According to Atiku, as well as stimulating the economy, the nation would invest in those most likely to be affected by the recession’s impact, the poorest of the poor, saying this also ensured that they did not fall deeper into severe poverty.
For example, a stimulus package to be made to any bank account holder in the form of monthly cash transfers of 5000, checked by a Bank Verification Number, whose total combined deposit was lower than the annual minimum wage in 2019.
Now, how’s this going to be funded? By making borrowing more profligate? Oh, no. I am proposing a luxury tax on goods and services which are only available to the super-wealthy. To support the very needy, a levy on the super rich.
A realistic solution 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 vehicles, on all imports and service charges for private jets, on all imports and sales of jewellery, on all designer products imported, produced or sold in Nigeria, and on all other luxury goods either manufactured or imported into Nigeria.
The proceeds of this tax should be allocated solely to the Fund for the Eradication of Poverty, which must be handled in the same manner as the Trust Fund for Tertiary Education or the Ecological Fund.’
I also suggest that the National Assembly should legislate a 1 percent poverty alleviation tax on the income of any international oil company operating in Nigeria and international airlines operating in Nigeria, which should also go to the proposed Poverty Eradication Fund.
Increasing the cost of goods and services that impact the poor is inhumane for us as a country, while keeping the cost of luxuries reasonably constant. We’ve got to flip this and instantly flip it he said.
Atiku added that Nigeria must, above all, stop borrowing for something other than critical needs, stating that borrowing to pay wages or invest in White Elephant projects is not an essential requirement .
This is especially important because we need cash at our hands, because the world and our economic and development partners are also focusing on helping to resolve the impact of COVID19 in their home economies.’ We must be saviors of our own.
The more we borrow, the more interest and principal payments we need cash to make, and the less cash we have to make the required 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,” he stated.