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ATIKU Abubakar, former vice president of Nigeria, has proposed ways the Nigeria government could explore to pull the country out of its newest recession
Atiku, who made this known in a statement titled, “We Must Exit This Recession With Precision”, noted that Nigeria could have avoided a second recession in five years if it had abided by a disciplined and prudent management of its economy.
“Yes, the COVID19 pandemic has exacerbated an already bad situation, however, we could have avoided this fate by a disciplined and prudent management of our economy,” he said.
“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.”
Atiku said that the proposed appropriation bill for the year 2020 can no longer be realizable, saying the country is too broke to finance such a budget.
“Firstly, the proposed 2021 budget presented to the National Assembly on Tuesday, October 8, 2020, is no longer tenable. 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.”
He asked that the non essential items which includes “estacodes, non emergency travel, feeding, welfare packages, overseas training, new vehicle purchases, office upgrades, non salary allowances” in the budget be cut.
He added that until Nigeria’s economic prospects improve, it 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).
Accordingly, Atiku said the government should stimulate the economy through investment on human development and by increasing the purchasing power of the most vulnerable of “our population.”
“Only a well developed populace can generate enough economic activity for the nation to exit this recession.
“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.”
This includes a stimulus package in the form of monthly cash transfers of ₦5000 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.
To actualize this, Atiku proposed “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.
“I further propose 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.”
Subsequently, he warned against any further form of borrowing for another purpose 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,” he said.
On Saturday, The ICIR had reported that Nigeria officially entered into its worst economic recession in over three decades, posting its worst growth rate since 1983.
According to the National Bureau of Statistics, NBS records released on Saturday, Nigeria’s economic growth contracted by -3.62 percent in the third quarter of 2020.