Why Tinubu’s Manifesto lacks Details On How To Build Nigeria’s Economy – By Kalu Aja
I have been reading Ahmed Bola Tinubu’s economic paper and It’s light on details.
Here are examples:
1 On exchange rate (page 19), this is the proposal..
“work with the Central Bank and the financial sector to carefully review and better optimise the exchange rate regime.” What does this mean?
2 On Tax Reform (page 16), it says “we will review the corporate tax system.” ‘Will review’ is not a plan, the review should already have been done and the proposed action plan detailed in this document.
3 Let’s get into more specifics. “Optimizing of Government Revenues (page 17),” says that it will “deploy same skills used in Lagos State.” Does this mean Alpha Beta Corporation which collects revenues in Lagos will be retained to collect federally due taxes and retain 10% of collections? It’s also a tad bit confusing.
4 Page 18 is on “Monetary Policy” but it discusses FISCAL strategy as well. I understand it to say there will be syncing of fiscal and monetary actions but monetary is larger outside the control of the Executive.
5 On inflation (page 20), the paper scores big. It states correctly that the inflation in Nigeria is supply driven not cost-push. It then says “usual anti-inflationary medicine” will not work. This is correct. It then correctly recommends to fix this inflation is to increase supply.
6 The biggest story however in the document is on page 14, the budget methodology. What I read is that the Tinubu administration will scrap the crude oil benchmark. This will allow the government to spend on deficits, without an “immunization” of revenues. Radical departure. Based on the ability to spend without oil benchmarks the Tinubu administration will pursue an expansion of money supply to employ millions and deploy them to infrastructure projects. This is very Teddy Rosevelt-like.
7 The Tinubu administration will also only borrow in $ for projects that generate revenues that repay the $ loans, (Page 21). Tie this into the mass employment of youth to build infrastructure, page 14. How much of this infrastructure will be revenue-generating?
8 On page 17, “waste in government,” Tinubu plans to “cap” fiscal expenditures to build government buildings, salaries & compensation of elected officials. This is very good, but why only elected officials? What about past pensions? Will past outrageous pension packages go?
The Tinubu administration wants a “strong” naira but seeks import substitution. Will a local expansion in Naira spending and a desire to boost local supply be supported on the basis of a strong naira?
8 The housing policy statements on page 24 are spot on but I would not mind more details and numbers
9 The agriculture plan on page 26 was a bit basic and ‘buzzwordish’. I liked the large-scale land clearing. That’s a quick win.
10 Power plan on page 30 has the same buzzwords and usual statements.
11 On Oil and gas (page 33). Nothing new of note is mentioned here except frontier oil drilling in Lake Chad. Seriously? However, gas prices are to be deregulated in 6 months. Then what? And page 37 says the PMS subsidy will go but does not say when.
In summary, it’s light on details. The big news here is the oil benchmark that will go. The focus on employment and the building of highways is also welcome. This is a progressive plan that will continue to fund social welfare programs. The big miss in the document is how it will fund this expansionary budget. It already says “increasing taxes is counterproductive.“ It says bulk of the money will come from “reducing leakages” I agree, but show me the details.
Overall, the document needs more drill down.
- Kalu Aja is a member of the Association for Financial Counseling and Planning Education (AFCPE) and the author of the book ‘Let’s talk about your money.’
