P
ProfRem
Guest
The news of President Muhammadu Buhari seeking emergency powers to reflate the economy went gaga on the social media, yesterday.
The emergency powers, according to President Buhari and his economic team will only last for one year.
According to the plan, the government is expected to send an Executive Bill to the National Assembly for Executive orders to tackle the economic crisis.
The objectives of the action-plan on the economy, which is in recession, include shoring up the value of the naira, creation of more jobs, boosting of foreign reserves, reviving the manufacturing sector and improving power.
Here are 7 things Nigerians need to know about the president's request for emergency powers to stimulate the economy - by seeking to by-pass major extant laws that may stand in as bottlenecks.
1. More Funds for State Governments
The bill seeks to amend certain laws, such as the Universal Basic Education (UBE) Act 2004.
The UBE Act states in section 11, sub-section 2, that “for any State to qualify for the federal government block grant pursuant to sub-section (1) of this section, such State shall contribute not less than 50% of the total cost of projects as its commitment in the execution of the project”.
With most states cash-strapped, the bill seeks to overrule this section, and allow states access about N58 billion “stuck” in UBEC’s coffers.
If the bill sails through, interested states would have N58 billion to spend through this economic crisis.
Analysts believed the proposal to review the UBEC Laws will surely help to unlock the liquidity, which the associated spending will provide.
2. Boosting Foreign Reserves
Nigeria’s foreign exchange reserves fell to an 11-year low on August 19, 2016, standing at $25.7billion.
With such depleting reserves, following a plunge in crude oil prices, the government is seeking to get emergency powers to sell and/or lease government property to raise $50 billion to shove the reserves.
3. End to Forex Crisis – Strengthening of Nation's Currency
With reserves in good shape, it would become immediately easier for the Central Bank of Nigeria (CBN) to defend the naira, and shore up its value in the face of dwindling oil prices.
A vote for this bill by the national assembly, should lead to a stronger naira against the dollar, an end to forex scarcity, and some stimulation in the Nigerian economy.
4. Job Opportunities
According to the Nigerian Bureau of Statistics report for the past three quarters, at least 1.5 million Nigerians have become unemployed.
The president and his team promised employment, and had not effectively delivered on that.
However, with the new bill, funds will be allotted for many capital projects, which will in turn generate employment.
With states having access to the UBE fund as stated in the bill, the school feeding programme of this administration may kick off and create employment in Nigeria’s vibrant informal sector.
5. Reducing Bureaucracy
The Nigerian procurement act has been reported time and again as cumbersome, stalling the speed of implementation of government projects.
This bill seeks to also “support stimulus spending on critical sectors of the economy; make orders to favour local contractors/suppliers in contract awards”.
6. Flexible Visa Process
Nigeria is desperate for foreign investment; foreign portfolio investment had declined by 86 percent in the past year, while foreign direct investment had plummeted by over 50 percent.
Osinbajo, who confirmed this at a presidential policy dialogue in Lagos, said the government was working on policies aimed at reducing fiscal and forex imbalances, boosting dollar liquidity, lending to the real sector, and increasing “FDIs and FPI by sustaining enabling policies”.
The bill, according to reports, seeks “to embark on radical reforms in visa issuance at Nigeria’s consular offices and on arrival in the country”.
This visa process, similar to that of the United Arab Emirates (UAE) and Ghana’s newly-adopted system, is to ensure ease of movement by investors into Nigeria.
7. Ease of Doing Business
Nigeria has lagged many developing countries on the ease of doing. The bottlenecks are enormous, the laws are strenuous, the tax policies are repetitive.
The bill seeks to address some of these issues and improve the ease of doing business in Nigeria.
The office of the vice president, when contacted, neither confirmed nor denied, the existence of the bill.
The emergency powers, according to President Buhari and his economic team will only last for one year.
According to the plan, the government is expected to send an Executive Bill to the National Assembly for Executive orders to tackle the economic crisis.
The objectives of the action-plan on the economy, which is in recession, include shoring up the value of the naira, creation of more jobs, boosting of foreign reserves, reviving the manufacturing sector and improving power.
Here are 7 things Nigerians need to know about the president's request for emergency powers to stimulate the economy - by seeking to by-pass major extant laws that may stand in as bottlenecks.
1. More Funds for State Governments
The bill seeks to amend certain laws, such as the Universal Basic Education (UBE) Act 2004.
The UBE Act states in section 11, sub-section 2, that “for any State to qualify for the federal government block grant pursuant to sub-section (1) of this section, such State shall contribute not less than 50% of the total cost of projects as its commitment in the execution of the project”.
With most states cash-strapped, the bill seeks to overrule this section, and allow states access about N58 billion “stuck” in UBEC’s coffers.
If the bill sails through, interested states would have N58 billion to spend through this economic crisis.
Analysts believed the proposal to review the UBEC Laws will surely help to unlock the liquidity, which the associated spending will provide.
2. Boosting Foreign Reserves
Nigeria’s foreign exchange reserves fell to an 11-year low on August 19, 2016, standing at $25.7billion.
With such depleting reserves, following a plunge in crude oil prices, the government is seeking to get emergency powers to sell and/or lease government property to raise $50 billion to shove the reserves.
3. End to Forex Crisis – Strengthening of Nation's Currency
With reserves in good shape, it would become immediately easier for the Central Bank of Nigeria (CBN) to defend the naira, and shore up its value in the face of dwindling oil prices.
A vote for this bill by the national assembly, should lead to a stronger naira against the dollar, an end to forex scarcity, and some stimulation in the Nigerian economy.
4. Job Opportunities
According to the Nigerian Bureau of Statistics report for the past three quarters, at least 1.5 million Nigerians have become unemployed.
The president and his team promised employment, and had not effectively delivered on that.
However, with the new bill, funds will be allotted for many capital projects, which will in turn generate employment.
With states having access to the UBE fund as stated in the bill, the school feeding programme of this administration may kick off and create employment in Nigeria’s vibrant informal sector.
5. Reducing Bureaucracy
The Nigerian procurement act has been reported time and again as cumbersome, stalling the speed of implementation of government projects.
This bill seeks to also “support stimulus spending on critical sectors of the economy; make orders to favour local contractors/suppliers in contract awards”.
6. Flexible Visa Process
Nigeria is desperate for foreign investment; foreign portfolio investment had declined by 86 percent in the past year, while foreign direct investment had plummeted by over 50 percent.
Osinbajo, who confirmed this at a presidential policy dialogue in Lagos, said the government was working on policies aimed at reducing fiscal and forex imbalances, boosting dollar liquidity, lending to the real sector, and increasing “FDIs and FPI by sustaining enabling policies”.
The bill, according to reports, seeks “to embark on radical reforms in visa issuance at Nigeria’s consular offices and on arrival in the country”.
This visa process, similar to that of the United Arab Emirates (UAE) and Ghana’s newly-adopted system, is to ensure ease of movement by investors into Nigeria.
7. Ease of Doing Business
Nigeria has lagged many developing countries on the ease of doing. The bottlenecks are enormous, the laws are strenuous, the tax policies are repetitive.
The bill seeks to address some of these issues and improve the ease of doing business in Nigeria.
The office of the vice president, when contacted, neither confirmed nor denied, the existence of the bill.