All I want for Christmas
The famous Mariah Carey song “All I want for Christmas” opens with a familiar refrain “I don’t want a lot for Christmas, there is just one thing I need.” Well I’m greedier than Mariah Carey and so I want five things for Christmas. Since this has primarily been a blog about public policy, it is only fitting that the five things I want for Christmas are policies of various stripes.
So without much ado, here are the five things I want from Santa:
Unban the 41 items. While we all know it was the Central Bank of Nigeria who banned the 41 items, we can all agree that we are no longer even pretending to have an independent central bank. Besides, the CBN by banning the 41 items is an intervention in the fiscal space. Even given the liquidity issues, a significant part of the distortion between parallel rate and the interbank rate is driven by the ban. If the ban is undone, maybe we can get to a $/N400 rate without resorting to armed DSS officials.
Remove the 70% automobile tariff. When the automotive policy was conceived, it was to encourage the creation of automotive hubs in Nigeria and to make it unattractive to buy imported cars vis a vis locally assembled cars. When the policy was first implemented the naira was at 150 to the dollar. The naira is now at 300 to the dollar or 480 if you are a grey market importer.
Which means that in naira terms the price of your car has doubled or even tripled. To throw a 70% surcharge on this new price adds insult to injury. The car imports will crater anyway. Which is why customs is moving to ban importation through land borders – believing it is smuggling affecting demand. I’d argue that the biggest impediment to demand is the fact that the same car is now three to four times more expensive. To stimulate car demand, they need to bring down the tariffs to the 20% of old not to have running gun battles in the villages around Badagry as people seek to smuggle cars in.
Pay FG (and SG) Pension arrears. One of the major victories of the Obasanjo administration was the establishment of the contributory pension scheme. The expectation was that we would no longer have tales of pensions being misappropriated by the very stewards of the various pension schemes. The hope was that the elderly amongst us would have even this small semblance of a social safety net. However one of the worrying trends in the past twenty four months is that the FG government chose to not pay its share of the pension contributions. It is not a good sign when it becomes acceptable to punt on pension contributions when times are hard. We hope going forward that such decisions would not be acceptable.
Bring Subsidy Back. My fellow market led folk should not be horrified at my seeming retreat to unorthodoxy. However this is the definition of a second best solution. We are now in a situation where there is a secret subsidy similar to the situation we were in before Obasanjo set up the PPPRA. The Federal Government has decided that N145 is the maximum petrol price they would allow and have commenced on a series of increasingly desperate moves to ignore the existing market price of around N200. I would prefer they let the market float, however that ship has sailed. So I would like them to not give a subsidy of N50 per litre through the back door. It creates significant avenues for corruption and will lead us right back to subsidy scam two.
Resource the NASS. One of the complaints of most Nigerians about the previous National Assemblies has been their general lack of productivity. It seemed that most Assemblies passed the bare minimum of bills they needed to in order to keep the country running. To their credit, this NASS has been active. However a lot of people, myself included, have had issues with number of the proposed bills and the clauses therein.
While some people have wished for a return to a less active national assembly, I believe that we should encourage the increased activity while finding ways to improve their effectiveness. My suggestion is that the National Assemblies do what the Congress did in the US and establish a version of the Congressional Research Service. This will serve as an internal technocratic non-partisan service for the National Assembly to aid them in their legislative work. If they also make the reports public that would also benefit the nation as a whole. Right now the National Assembly seems subject to information provided by other interested parties. The National Assembly should fund it from their N120 billion annual budget. Dedicating say N20 billion per annum to build this service could significantly benefit the nation.
There you have it. My Christmas wishes. Of course, I’d be pleased if they do and that will be the real Christmas miracle. Thank you all for reading this year. I’ll see you here again in 2017. Happy New Year in advance.