Setting the Agenda for the Next Administration: Economic Transformation

By

*Adeboye ADEYEMO

Once the election is over and a new President is inaugurated, the President’s job starts immediately and it is seemingly simple, i.e. to fulfill all promises made during election campaigns. The greatest expectation of the electorate is a Better Life, through improved economy. The citizens want to have improved personal income, security of life and property, and access to basic amenities such as good education, health and other infrastructural facilities that can guarantee improved quality of life. What will make this possible is a growing economy with shared prosperity. Therefore, the preoccupation of the new administration that will take over come May 29, 2023 is how to stabilise, grow, and transform the economy within the first four years of the administration. The following are critical actions, that the next President should consider to stabilise, grow and transform the economy.

1. Macroeconomic Stabilsation

Currently the economy is not performing well due to policy inactions or failures to implement appropriately in key areas resulting in misalignment between expected performance and actual performance of the economy. By 2022 inflation was around 18.85%, the highest in about 2 decades; Interest rate was 16.50%; exchange rate averaged N456 to the dollar in the I&E Window and N740 to the dollar in the parallel market. Unemployment was 33.3%, deficit spending was3.39% of the GDP and the GDP grew at 2.25%. All the indices show an economy in distress when compared to 2010. For the economy to be stabilised, it has to be reversed.

Key action points required to reverse the negative indices and stabilize the macroeconomy are:

i. Stop all forms of oil theft and take full control with proper accountability of all crude oil transactions to ensure steady flow of oil revenue in the immediate.

ii. Make sure all refineries work within the next 3-6 months in office.

iii. Stop subsidy to petroleum products and use saved money in the education, health and social investment projects.

iv. Ensure tax compliance and that all taxes are remitted as at when due.

v. All revenue agencies must give accurate account of money collected and no more zero remittances.

vi. Rigorous implementation of the newly created Ministry of Finance Incorporated (MOFI) mandate to grow and use national asset to fund economic plans instead of debt accumulation.

vii. Stop all forex allocation to BDC and special rates to selected few (BDC and Banks should freely source for their forex needs)

viii. Stop BTA for pilgrimages and vacation

ix. Pursuance of appropriate fiscal, monetary and external -sector policies through effective institutional coordination mechanism of the form of an economic management team.

x. Strengthen all regulatory authorities for improved performance

2. Macroeconomic Growth

The actions required are:

i. Effective implementation of Fiscal Responsibility Act of 2007.

ii. Increase revenues through improved tax compliance, a wider tax-base, extensive performance management of government-owned enterprises and enabling laws and policies.

iii. Plug external resources leakages by fixing problems in the education and health sectors to make these sectors attractive to Nigerians to patronise. Give full autonomy to tertiary institutions (education and health) and make them self -funding. While basic education and basic health care could be partially funded by existing funding and perhaps a more innovative funding mechanism.

iv. Promote Export of non-Oil exports especially solid minerals, agricultural products, and human capital resource.

v. Provide support to existing businesses to be able to retain and create new jobs through BOI, BOA, SMEDAN etc.

vi. Pursue trade policies that are favourable to the growth of local industries.

vii. Remove all bottlenecks to the ease of doing business.

3. Economic Transformation

i. Amend the Constitution to allow for fiscal federalism and a federal system of government.

ii. Devolution of powers to the State and Local Government Areas making them socio economic delivery centres.

iii. Creation of State Police and Community Police to enforce law and intelligence gathering.

iv. Massive investment in Infrastructural development such as Housing construction, power and renewable energy, road, rail, urban renewal, renovation of schools, hospitals, dams etc.

In conclusion, it is important note that to stabilise and stimulate economic growth does not require new laws or policies. It is just vigorous and courageous implementation of existing policies and frameworks. For structural transformation of the economy, it may require amendment to the constitutional framework or the use of Executive Orders and or declaration of State of Emergency to bypass obstacles from any existing constitutional or legal provisions/limitations.

*Adeboye Adeyemo (PhD) is an Economist, Policy & Strategy, and M&E Specialist

This paper was presented at our policy dialogue, titled, 'An Agenda For The Next President', held in Lagos on February 7th, 2023.