As Nigeria continues to witness economic meltdown and hardship bites harder, the Nigerian Economic Summit Group (NESG) has asked the Nigerian government to take some measures like cutting down on the cost of governance and blocking leakages in order to sustain the economy amid the dwindling economy.
This is part of the recommendations contained in a communiqué issued at the end of the meeting of the Board of Directors of NESG and signed by Asue Ighodalo on behalf of the Board of Directors.
The Communiqué noted that the Nigerian government needs to take decisive action to tackle the challenges of revenue which it said are largely caused by leakages through the large-scale crude oil theft, the difficult operating environment for businesses, and lack of innovation in tax collection/administration, among others, that have resulted in low accretion to the nation’s revenue base.
NESG said it believes that these leakages have continued unabated because of the absence of sanctions and ineffective tax systems.
“We must return to the path of debt sustainability in the face of dwindling revenues not to create a debt burden for future governments and, indeed, future generations. We must prioritize our expenditure, limit our spending to items we can sustain, and eliminate wastage and graft in government.
“Governments, across all tiers, should lead by example through a drastic reduction in governance costs (such as running costs of the legislatures, the proliferation of government agencies, etc.) to reflect the austere times we face.
“We strongly advise greater transparency and simplicity in the management and communication of various subsidies (petroleum products, electricity, etc.) to establish their true costs that benefit the people.
“Urgent action is required to ensure food self-sufficiency by prioritizing critical value chains and supporting private sector-led interventions to curtail this crisis and build a vibrant and sustainable food ecosystem in Nigeria based on consistent incentives and sanctions”, the Communiqué said.
NESG said the failure to address the currently prevailing condition of multiple exchange rates continues to reduce the much-needed flow of foreign investments and official diaspora remittances.
The Group said international investors, being savvy and rational, will not invest where there is a real risk to their ability to access and repatriate investment proceeds or when the functional currency is in sporadic depreciation.
“Multiple foreign exchange (FX) markets with significant price differentials create room for speculation, round-tripping, cronyism, and outright graft – with an attendant adverse effect on the economy.
“There is no better time to harmonize the FX rates than now. The proposed Medium Term Expenditure Framework of the Federal Government clearly indicates that the rising fuel subsidy costs continue to exceed unsustainable levels.
“According to reports from the Federal Ministry of Finance, Budget and National Planning, it is clear that the current fuel subsidy regime’s debilitating impact on our fiscal fragility cannot be overstated.
NESG, however, urged the Federal Government to explore a systematic subsidy removal programme that cushions the impact on the nation’s vulnerable population through a well-coordinated and effectively transmitted social protection regime.
“The Federal Government is urged to devise a pragmatic national security strategy that unconditionally guarantees the safety of lives and properties within the country.
“The ongoing face-off between the Federal Government and the Academic Staff Union of Universities (ASUU), which has resulted in the closure of universities for about six months, has become a national embarrassment.
“The increased tension and apprehension within the citizenry arising from the effect of the economy deserve urgent attention. We appeal to our leaders and agents of the Government to do all within their means to douse the tensions and assuage the feelings and sensitivities of the people through their utterances, actions, and conduct.
“The NESG calls for a new social contract between the Government and the people of Nigeria to reduce the growing trust deficit. The goodwill that a government enjoys from its people is no different from the operation of a bank account – in this case, an emotional bank account”, the communiqué added.
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