NATIONAL: Recession: Delist non-essential line items from 2021 budget, Atiku counsels Buhari

FORMER Vice President Atiku Abubakar  said Nigeria would not have slid into a recession if the Buhari administration had heeded his counsel.

This is coming on the heels of the official announcement that Nigeria has entered into its worst economic recession in 33 years after the nation recorded a GDP contraction of 3.62 percent in the third quarter of 2020.

Atiku, who said the Buhari administration is fond of turning down advice from eminent Nigerians on national economy, said the government must be deliberate about his decisions to avert a situation worse than the current one.

The People’s Democratic Party’s presidential  candidate in the 2019 general elections  advised  the government to delist all non essential line items from the proposed 2021 budget as a means saving costs as the country enters another phase of recession.

“As a matter of importance and urgency, every non essential line item in the proposed 2021 budget must be expunged. For the avoidance of doubt, this ought to include estacodes, non emergency travel, feeding, welfare packages, overseas training, new vehicle purchases, office upgrades, non salary allowances, etc.

“Until our economic prospects improve, Nigeria ought to exclusively focus on making budgetary proposals for essential items, which include reasonable wages and salaries, infrastructural projects, and social services (citizenry’s health, and other human development investments).

“For a start, the proposed 2021 budget presented to the National Assembly on Tuesday, October 8, 2020, is no longer tenable. Nigeria neither has the resources, or the need to implement such a luxury heavy budget. The nation is broke, but not broken. However, if we continue to spend lavishly, even when we do not earn commensurately, we would go from being a broke nation, to being a broken nation.”

While admitting the Covid-19 pandemic played a negative role in economic development, Atiku said “we could have avoided this fate by a disciplined and prudent management of our economy”.

“This could have been avoided had this administration taken heed to the patriotic counsel given by myself and other well-meaning Nigerians on cutting the cost of governance, saving for a rainy day, and avoiding profligate borrowing,”

He further said that now is not the time to trade blames but to focus on ways to manage the situation and called on Buhari’s government to “swallow its pride, and accept its limitations, so that they can open their minds to ideas, without caring who the messenger is”. He added.

He further recommended that the federal government should invest in a stimulus package “in the form of monthly cash transfers of ₦5000” to mitigate the effect of the recession on the poor while taxing luxury items and services used by the rich.”

“A practical approach to this is to place a 15% tax on all business and first-class tickets sold to and from Nigeria, on all luxury car imports and sales, on all private jets imports and service charges, on all jewellery imports and sales, on all designer products imported, produced or sold in Nigeria, and on all other luxury goods either manufactured or imported into Nigeria, with the exception of goods made for export.

“The proceeds of this tax should be exclusively dedicated to a Poverty Eradication Fund, which must be managed in the same manner as the Tertiary Education Trust Fund, or the Ecological Fund.

“I further propose that a 1% poverty alleviation tax should be legislated by the national assembly on the profits of every international oil company operating in Nigeria, and international airlines doing business in Nigeria, which should also go towards the proposed Poverty Eradication Fund.

“And above all, Nigeria must stop borrowing for anything other than essential needs. Again, for the avoidance of doubt, borrowing to pay salaries, or to engage in White Elephant projects, is not an essential need.

“This is particularly important as we need cash at hand because the world and our economic and development partners are also focused on helping their home economies overcome the effects of Covid-19. We must be our own saviours.”

The Buhari-led administration said it is already taking steps to reduce the cost of governance by implementing the Stephen Oronsaye report.