Tinubu’s Advisory Council recommends assets sale to settle debt obligations

THE Policy Advisory Council of President Bola Ahmed Tinubu has recommended the sale of national assets, including refineries, to settle the debt obligations of the Federal government.

Nigeria owes more than N40 trillion in both foreign and national debts. Experts are worried that the country might be using 100 per cent of generated revenues to service debts.

But the Council, in its report chaired by Senator Tokunbo Abiru, recommended “a policy directive that ensures proceeds from the sale of assets to settle existing Federal government’s debt obligations.”

Other fiscal recommendations included “listing shares of strategic and profitable Nigerian National Petroleum Corporation Limited (NNPCL) subsidiaries, leveraging blockchain to create and provide access to a government land registry, and regionalizing and concessioning the power transmission grid.”

The Council also advised privatizing, concessioning, or selling the Federal government’s stake in corporate assets to generate liquidity, focusing on sub-optimal assets like NNPCL refineries.

Contrary to the Supreme Court’s ruling, the President was also advised to extend the circulation of old naira notes until December 2024 to resolve potential cash shortages.

The apex court had shifted the deadline to December 2023 due to economic crises resulting from the naira redesign policy under former president Muhammadu Buhari’s administration.

According to a report by the Punch newspaper, the four-man Council advised a gradual replacement of old notes with new ones through deposit money banks at a rate of five per cent monthly.

The report also outlined various economic decisions that should be made by the President to improve the country’s economic fortunes.

One of the Council’s proposals is the merger of the Federal Inland Revenue Service (FIRS), the Nigerian Customs Service (NCS), and the Nigerian Maritime Administration and Safety Agency (NIMASA) into the Nigerian Revenue Service.

This consolidation aims at enhancing the efficient collection of direct and indirect taxes, as well as levies on behalf of the Federal government.

The Council emphasised that the proposed policy would require the passage of an Emergency Economic Reform Bill that would grant the President special powers to drive economic reform and support sustainable and inclusive economic growth.

Additionally, the Council outlined several targets to be pursued within the first 100 days in office, including the removal of fuel subsidy, the sale or concession of select government assets, and the transition to a transparent and unified foreign exchange rate system, which the president had already done.

The Council’s report emphasised the significance of reforms in the Central Bank of Nigeria (CBN) and the implementation of the civil service reform as part of the economic reform agenda.

It suggested making interim leadership appointments in the apex bank, subject to ratification by the National Assembly, and temporary increases in fiscal circuit-breakers such as debt limits, also to be ratified by the National Assembly.

The 90-page report focused on fiscal and monetary policies, industry, trade, and capital market reforms.

It highlighted that changes in the CBN and temporary increases in fiscal circuit breakers would contribute to achieving a gross domestic product (GDP) growth of N1 trillion, and generating over 50 million jobs within eight years.

To achieve these goals, the report proposed reforms in the CBN to attain external reserves of $50 billion to $60 billion, with a monthly inflow of at least $6 billion to $8 billion from export earnings and other capital inflows.

It further suggested the implementation of a domestic refining capacity of two million barrels per day, and providing economic opportunities for host communities.

“Ramp up production capacity to four million barrels from offshore and onshore assets within four years, and grow crude oil revenue and savings into ECA (Excess Crude Account) and NSIA (Nigeria Sovereign Investment Authority).






     

     

    “Formalise illegal refineries and encourage modular refineries to create economic opportunity for the host communities.

    “Aggressively grow domestic refining capacity to two million barrels per day in the next eight years, including modular refineries,” it noted.

    The Council recommended offering one-off Personal Income Tax reliefs to low-income earners for up to one year as non-cash palliatives to cushion the impact of fuel subsidy removal. Furthermore, it proposed formalizing illegal refineries and encouraging the establishment of modular refineries to create economic opportunities for host communities.

    To transform Nigeria into Africa’s most efficient trading nation, the Council proposed decongesting the area around ports up to four kilometres, enforcing the 48-hour clearance of goods at seaports in line with Executive Order 001, redefining the performance measures of key government agencies to prioritise trade facilitation, and implementing a whistle-blowing mechanism for transporters to report issues.

    You can reach out to me on Twitter via: vincent_ufuoma

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