The country has been in economic recession, whether ‘technical’ or real, for months now. The Naira has broken its own lowest point against the dollar several times this year, workers are consistently being laid off and manufacturing activities are at an all-time low. The results have been felt in every sector with economic activities almost grinding to a halt.
In the light of these problems, the FG has been seeking methods to stimulate the economy. Cash injection, modifications of policies regarding foreign exchange and others are methods already in place. The economic team set up by President Buhari, though, has come up with an economic plan that is expected to rapidly stimulate economic activities. The President is set to reveal this plan in a bill titled ‘Emergency Economic Stabilization Bill 2016’. What are the features of this bill?
Broadly speaking, the Bill seeks to modify existing laws that seems to elongate any processes that can release cash into the economy. The President wants to be given the powers to bypass these laws in order to accelerate the implementation of economic recovery projects within one year.
Analysis of the request of the President can classify the powers he is seeking into 2, i.e. those related to process/conditions and those related to funding. Among those related to process and conditions include the power to abridge the procurement process. The current laws on procurement demand that a contract be awarded not earlier than 6 months after it is approved. Such law, the President is seeking to modify, noting that the period is too long considering current situation.
Another example of the laws regarding processes and conditions is the requirement of counterpart funding. Currently, the Universal Basic Education Commission, UBEC, has about N58 billion that cannot be accessed by states, due to a condition that the States must provide 50% counterpart funding. The Presidency is seeking to reduce this to 10% to enable states access the funds and embark on educational projects, which will provide jobs and stimulate other sectors and industries.
Examples of current laws regarding funding that the President seeks to modify are those allowing for an initial release of not more than 15% of the contract sum to contractors as well as sale and lease of government properties without red tape.
With the President set to demand these powers from the legislature, it remains to be seen how comfortable the legislature will be with such demands. Possible contentious issues will be for how long the President seeks to have these powers, possible misuse of the powers and possible bias to certain regions in the implantation of the Bill. Thus, from an economic standpoint, the Bill seems like the concise direction Nigerians have been seeking from the administration. But whether political forces will detract from its proper implementation or even allow it to see the light of the day remains to be seen.