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Emergency economic powers: Matters arising

By Editorial Board
30 August 2016   |   4:30 am
As President Muhammadu crafts a bill that would allow the National Assembly grant him emergency powers to rescue Nigeria’s economy from recession, no one can miss his sense of urgency, even desperation, to make life more abundant for Nigerians.
National Assembly

National Assembly

As President Muhammadu crafts a bill that would allow the National Assembly grant him emergency powers to rescue Nigeria’s economy from recession, no one can miss his sense of urgency, even desperation, to make life more abundant for Nigerians. An executive bill titled: “Emergency Economic Stabilisation Bill 2016” is reportedly being prepared for presentation to the National Assembly in the next few days. The powers being sought are claimed to be needed to push the government’s planned stimulus for the economy. The objectives include shoring up the value of the naira, creation of more jobs, boosting of foreign reserves, reviving the manufacturing sector and improving power.

The bill if passed, would give the President sweeping powers to set aside some extant laws and use executive orders for an economic recovery package within the next one year. Among the powers being sought are to: abridge the procurement process to support capital spending on critical sectors of the economy; make orders to favour local contractors and suppliers in contract awards; abridge the process of sale or lease of government assets to generate revenue; and unilaterally allow virement of budgetary allocation to projects. Other provisions seek to amend certain laws, such as the Universal Basic Education Commission (UBEC) Act, that will reduce counterpart funding requirements by states from 50% to 10%.

Nigerians need to be saved from their prostrate condition, no doubt. And quickly too! But there are issues that need to be considered carefully before granting any economic emergency powers, no matter how noble the intentions may be. First, the government has itself to blame for its lethargic approach to addressing pertinent economic challenges facing the country. This newspaper pointed out this much in its editorial in April 2016 on “Beyond the Economic Blame Game” in which it recounted how President Franklin D. Roosevelt (FDR) of the United States of America within the first 100 days of his Presidency put together and passed through Congress an economic plan under the New Deal that included banking and financial reforms, civil and public work of roads, dams and other projects, and large-scale job and employment schemes.

In many ways, the election of Nigeria’s President Buhari in March 2015 was similar to that of FDR of over 80 years ago. President Buhari inherited a stalled economy with oil prices, its major foreign exchange earnings, in a free fall. Since the inauguration of Buhari in May 2015, the economy has taken a further downturn as measures of real GDP growth, unemployment, inflation, exchange rates and the misery index worsened.

In fairness, immediately after the election, a Presidential Transition Committee, akin to the FDR’s Brains Trust was put in place. Similar to the FDR’s New Deal and anchored on the APC’s Manifesto, it submitted its Report in June 2015 based on three pillars of Relief, Recovery, and Reform.

From thereon, speedy economic policy formulation and execution essentially stalled due to lack of vision, direction, and an effective economic leadership team. The budget was submitted late and its final approval by the National Assembly was further delayed to the second quarter of 2016. This is August and the nation is still being regaled with news of budget padding by principal officers of the National Assembly, while the Executive arm has spent precious time blaming the previous administration for economic downturn. There is no doubt that the Goodluck Jonathan Administration squandered huge oil windfalls. After more than one year and three months in government, however, there should be a limit to the lamentation of the bad economy inherited from the previous administration.

Nigerians voted President Buhari partly to deal with the inherited economic challenges. Nigerians want to move forward with pragmatic solutions to the country’s dwindling fortunes, the diminishing value of the naira reaching N400 at parallel market and hitting N365 in intra-day trading at the inter-bank market, the rising fuel prices with diesel prices reaching N220, and incessant outages.

It is in this context that any serious and lawful attempts to concentrate minds and efforts to revitalise the economy for the benefit of all Nigerians should be welcome. We urge, however, that a sweeping emergency powers in a democracy must be carefully scrutinised such that the rights of Nigerians, and the powers of their collective elected representatives within the National Assembly are not abbreviated, especially by a presidency that is perceived to be inherently dictatorial given its past antecedents.

There are, indeed, so many things President Buhari can do to revive the economy and they do not require emergency economic powers. In fact, the President’s request, in that context, is nothing more than a classic case of an over-pampered child demanding a bowl of palm oil with which to eat his palm fruit.

The coordination of macroeconomic policies between the fiscal and the monetary authorities is one. Another area is clarity and consistency with economic philosophy and policy direction of the government. For instance, the ideological posture of the administration had prevented quick executive actions within the first 100 days on fuel subsidy and other areas. There was also enough to suggest that the hands of the supposedly independent Central Bank of Nigeria were tied behind it for more than one year.

There are other areas that border more on inefficiencies and bureaucratic red tapism. Why is an emergency power needed to embark on radical reforms in visa issuance at Nigeria’s consular offices and on arrival in the country or to compel some agencies of government like the Corporate Affairs Commission (CAC), the National Agency for Foods and Drug Administration and Control (NAFDAC) and others to improve on their operations? As observed by concerned Nigerians, the parochial and lopsided appointments to key institutions including economic regulatory agencies have revealed the incompetence of the administration on economic matters.

A very sensitive area is procurement for large sums of contracts as well as assets sales. Capital spending releases from the budget so far are at N400 billion compared to a budget of N1.7 trillion for capital expenditures. There is need to to speed up infrastructure spending that would have direct impact on job creation. Emergency powers relating to procurement should be well crafted and targeted to prevent abuses.

Such powers should not be used for opening up another avenue for malfeasance, cornering of government assets for private gains by those in the corridors of power. Emergency powers could so easily become another window for wealth accumulation and re-distribution of the commanding heights of the economy in the public sector to cronies, who may feel this is their own turn, having been out of government for over a decade and a half.

We urge the nation to tread carefully and deliberately when it comes to issues relating to by-passing extant laws with sweeping emergency economic powers. If there are genuine and deserving areas that require such emergency powers they should be time-bound, specific in scope, and with measurable targets and safeguard provisions.