President Muhammadu Buhari last week disbanded the Economic Management Team headed by Vice President Yemi Osinbajo and constituted a new Economic Advisory Council (EAC). The EAC is chaired by Professor Doyin Salami of the Lagos Business School. Other members include Dr. Mohammed Sagagi, Prof. Chukwuma Soludo, Prof. Ode Ojowu, Dr. Iyabo Masha, Mr. Bismarck Rewane, Dr. Shehu Yahaya, and Dr. Mohammed Adaya Salisu.
The team, according to the Special Adviser on Media and Publicity to the President, Femi Adesina, will advise the President on economic policy matters, including fiscal analysis, economic growth and a range of internal and global economic issues. They should also work with relevant Cabinet members and heads of monetary and fiscal agencies. In addition, the Council is expected to assist the president in the development of critical policies. The Council will also hold monthly technical sessions as well as scheduled quarterly meetings with the President. However, the chairman of the Council may request for unscheduled meeting with the President if the need arises.
Expectedly, the setting up of the Economic Advisory Council has excited many Nigerians. There is a unanimous agreement among them that the new team of advisers would help the president to revamp the economy. We commend the President for setting up the team. Perhaps this is the most significant move the president has made since his second term in office. Undoubtedly, members of the economic team are Nigerians, who have distinguished themselves in their chosen fields, such as macroeconomics, monetary and fiscal policy, developmental theory and financial markets.
We believe that the President is aware of the dire state of the economy. Therefore, he should be willing to listen to the advice the team will give him to move the economy forward. Indeed, his administration will be the ultimate beneficiary if he takes the advice and recommendations of the members of the Council. We urge the president to let the members have access to him whenever the need arises. On no account should the members be debarred from having contact with the president in the course of their assignment. They must be given the chance to succeed.
The team is coming at a time the economy is not doing so well. The fundamentals of the economy have weakened. The economy has been growing at less than two per cent, far less than projected. The budget deficit is also rising, while revenue generation is declining and debt profile is increasing. According to data from the Ministry of Finance, Budget and National Planning, in the first half of 2019, the Federal Government was able to raise only N2 trillion. This is 30 per cent off the mark of projected revenues of N2.9 trillion for the period, and N6.9 trillion for the full year.
Also, between January and July this year, the Federal Government recorded a fiscal deficit of N1.15 trillion, according to figures from the Central Bank of Nigeria. In the second quarter of 2019, Nigeria’s GDP dropped by 0.16 percentage points to 1.94 per cent. Also, unemployment and poverty have reached frightening levels, making Nigeria the “poverty capital of the world.” The situation made the President to anticipate a fiscal crisis. The President’s admission of the sorry state of the economy is in line with warnings by experts that the country may face tough times unless something drastic is done to diversify the economy.
These concerns, and many others, should guide the Council in its assignment. Therefore, we enjoin the council to focus on how to broaden government’s revenue apart from the current multiplicity of taxes that are inimical to business activities. The members of the team should come up with practical measures to reduce government’s recurrent expenditure, enhance budget transparency and growth of export sector.
They should accelerate public-private partnership for critical infrastructure that will attract private capital to the economy and address the challenges facing investments in the country. The Council should ensure that other critical sectors of the economy, such as the manufacturing, financial services, maritime and aviation sectors are working. Doing this would transform the economy, create jobs and pull millions of Nigerians out of poverty. Good enough, the President has promised to lift 100 million Nigerians out of poverty in 10 years. This can only be achieved with a private sector that is over 10 times larger than it is at the moment. There is need to improve the implementation of the government’s Economic Recovery Growth Plan (ERGP). As currently packaged, it has not been able to spur rapid economic growth and development. Of critical importance is the power sector, which remains a major drawback to economic growth. At less than 4,000 MW of electricity generation, key sectors of the economy cannot make the necessary impact to stimulate growth.
In all, we urge the members of the Advisory Council to make far-reaching recommendations that will engender sustainable economic growth.
