By Suleiman Umaru
At a time , President Muhammadu Buhari has set up a Committee to recover the over N5 trillion allegedly owed the Asset Management Corporation Of Nigeria, AMCON, by twenty selected Nigerians and Organisations, which Godwin Emefiele, governor of Central Bank of Nigeria, CBN, who is at the forefront to ensure that the government impose harsher economic measures on Nigerians to raise the revenue for funding of its budgetary provisions in order to stop borrowing , appears to be at it again.
Emefiele, was said to have suggested to the Katsina state born Nigerian President who has his ears to consider the sale of the Public Assets still currently under the control of the government a waya to increase its revenue generation base in the next four years to run the Administration.
The CBN, governor, who was not pretending about it, was said to have impressed it on the President that the sale of the alleged redundant Assets would create significant revenue for the government and resuscitate the public Assets which are currently working in bits and fits to create opportunities for the teeming unemployed graduates and contribute to the country’s economic development.
He was very emphatic: it would improve fiscal revenue to support the government yearly expenditure and reduce the budgetary deficits and the government internal and external borrowings. He may have reeled out figures obtained from the Debt Management Office, DMO, to convince him on why AMCON, should be allowed to put the alleged redundant public Assets for Sale.
But there are fears in both official and unofficial circles that the public Assets may fall into the awaiting hand of few Nigerians, who may still not be able to able settle the bill on the long run. The case of multi-millionaires Ifeanyi Ubah of Capital Oil, Wale Babalakin, Bi-Courtney Limited, Josephdam &Sons Limited owned by Kuteyi family, Tinapa Business Resort of Cross River state government and 16 other selected Nigerians and Companies , Muiz Banire, Chairman, AMCON, disclosed owed the country N5 trillion, for public Assets purchased over the last couple of years speaks volume.
Many believe that if the AMCON big time debtors had settled their debts without resorting to Court to delay the payment , it would have gone a long way to defray some of the country’s domestic debts.
Note that as at December, 2018, the DMO , had presented a report to the CBN, showing that the country debt profile had increased to N24 tr or N81.274 billion. Officials of the DMO, were said to have attributed the increase of the public debt in the first quarter of 2019 alone, to the domestic debt , largely owed the Banks , which grew by N458.4 billion. The external debts to the World Bank and the Paris Club was said to have hit the N101.646 billion mark.
The DMO, may have gladdened the mind of Emefiele, the apex Bank governor, when it said that the total public debt to the country’s GDP ratio was still manageable as it stood at 19.03 % which was within the 25% debt limit imposed by the current Administration.
Notwithstanding the cheering news that had been painted by the DMO, about the country’s debt profile, in terms of both domestic and external, the CBN , governor believes he has a solution to stop further borrowing by the government to fund its budgetary provisions still lies in increasing fiscal agencies service charges.
It is not surprising why he has been Collaborating with Hajia Zainab Ahmed, the minister of Finance, Budget and Planning, to shift the burden of raising the revenue to fund the government expenditure on Nigerians by embarking on the revenue generation growth initiative.
The fallout was the increase in the Bank Charges on withdrawal and Deposit on Individual Accounts above N500,000.00 to 3% and 2 % respectively. The Deposit Banks were also given the nod to increase their charges that would complement its existing charges. The Corporate Organisations were the worst hit as it increased their charges on withdrawals and deposits above N3million to 5% and 3% respectively.
This is bad news for the multinational Companies, Dangote Industries and other big time Companies operating in Nigeria, as the new charges are expected to come into effect March, 2020, despite the strong opposition from the Femi Gbajabiamila, led House of Representatives.
The duo were also said to have won the heart of yemi Osinbajo, the Vice President and former Chairman of Nation Economic Council, NEC, to increase the federal Revenue Services, FIRS, Value Added Tax, VAT, on food , drugs and other items that may be included on the list from 5% to 7.5 %, showing an increase of 50% .
Recall that when the minister hinted in 2018, that VAT would be increased, Ahmed Bola Tinubu, a former governor of Lagos state and National Leader of the ruling All Progressive Congress, APC, had kicked against it, urging Osibanjo,led NEC, Comprising of the state governors , CBN and other Captains of the Industry to halt the plan as ‘’it was capable of worsening the nation’s economic challenges’’. Tinubu, popular, Jagaban, in political circles, was said to have made it clear to the Vice President that the ‘’Consumers’ spending was slipping and the need for palliative measures. He was said to have made it clear to him, that if the government eventually succeeds in reducing the purchasing power of the people, ‘’it would further slow down the economy.
Mansur Ahmed, an Engineer and President, Manufacturers Association of Nigeria, MAN, may have corroborated his views as he was said to have advised then NEC, to jettison the plan, which he had described as’’ unproductive’’ because of the payment of the N30,000.00 new minimum wage which many Companies are still struggling to pay because of the drop in production and low sales of manufactured products.
The Nigerian Employers Consultative Forum, NECA, on its part said the VAT increase would do more harm to the already burdened private sector. Despite the strong opinions expressed by Tinubu, a former Lagos state governors, MAN and NECA, on the VAT increase, Osinbajo led former NEC, had their way at the Federal Executive Council, FEC, which approved it.
The President may have known that there is trouble ahead that he quickly replaced the Controversial NEC, with an Economic Advisory Council, EAC, made up of Professionals, which the President placed under his control. The members of the new Economic Management Team, which include Charles Soludo, a Professor and former , governor of CBN, according to Garba Shehu, a Senior Special Assistant to the President on Media and Publicity , have unlimited access to him on matters relating to the economy. The establishment of EAC, to take over the management of the country’s economy may have given Nigerians and the private sector hope that the unpopular economic policies of the former Osinbajo led NEC, would be reversed as the professionals would revisit the government revenue generation growth initiative which gave rise to increase in service charges of Banks and the fiscal agencies, particular, FIRS.