Nigerian governors have asked president Mohammadu Buhari to urgently take steps to halt the current slide towards economic collapse, and have made suggestions on how to do it.
What are their suggestions?
Expressing concern over the deteriorating state of the economy and the potential effect on the 2023 general elections, the governors urged the president to immediately take steps to instill fiscal discipline, to avoid the potential catastrophe that may result from the worsening revenue-expenditure crisis. The suggestions were made during a recent meeting between the governors and the president. The measures recommended involved making significant cuts to government spending.
What are these measures?
The governors urged President Buhari to immediately halt the Central Bank of Nigeria’s financing of the government’s budgetary expenditures and convert its N19t debt owed to the CBN into a 100-year bond. As part of measures to reduce the government’s recurrent expenditure bill, the governors urged the federal government to offer civil servants who are 50 years or older a one-off retirement package to exit the civil service. These and other measures, according to the governors, will enable the FG to save trillions of naira and be better placed to finance critical obligations.
Are there details of how the savings will be achieved?
The measures recommended, with estimated savings in a bracket, include; a reduction of FG’s expenditure, reducing personnel costs, and redefining the CBN’s role in the economy. Their suggestions include;
• Eliminate PMS subsidy/under-recovery (N6-7t),
• Eliminate NNPC’s Federation-funded projects (N300b),
• Cap Social Investment Program (SIP) and National Poverty Reduction with Growth Strategy (NPRGS) budgets to N200b (N570b),
• Eliminate extra-constitutional deductions from FAAC (N100b),
• Reduce SWV items for SDG and NASS Constituency projects (N300b),
• Reduce duplications (e.g. empowerment programs) and waste (N100b), and
• Reduce 1% granted to NASENI to 0.2%. Amend the Act in the 2022 Finance Bill.
In reducing personnel costs, they urged the FG to, among others;
• Begin implementation of the updated Stephen Oronsaye Report (N1t),
• Expedite privatization of non-performing assets. (Billions of Naira),
• Reconsider the planned 22% increase in salaries,
• Reduce fiscal deficit to no more than 2% of GDP in 2023 – 2025, and
• Halt foreign trips by MDAs, including budgetary-independent agencies such as CBN, FIRS, NPA, NIMASA, and NCC, for at least one year.