TRACKING_____All Progressives Congress (APC) National Leader, Asiwaju Bola Ahmed Tinubu, yesterday enjoined the Federal Government to ensure food security and enthrone a robust economy for an effective COVID-19 fight.
In a statement, the former governor of Lagos State advised President Muhammadu Buhari administration to suspend or amend the five per cent deficit limit of the Fiscal Responsibility Act.
His words: “The Fiscal Responsibility Act prohibits fiscal deficit of more than five per cent of the Gross Domestic Product (GDP). This provision was fashioned after the Maastricht Treaty governing membership in the Eurozone. Eurozone members never honoured the deficit ceiling even in normal times. It was too impracticable and deflationary to abide with. Given the exigencies of the current moment, the Eurozone has completely ignored the Maastricht limits.
“The fiscal responsibility limit, while perhaps well-intentioned, is, to say the least, inapt for a nation in our economic situation. The provision is based on two inaccurate assumptions.”
He feared contraction, adding: “However, in the present case, the threat we face is more recessionary than inflationary. A bit of inflation is the cost we should be prepared to pay to avert severe contraction. The best step would be to suspend the five per cent budgetary limit for this fiscal year. Alternatively, the limit should be raised to 25-30 per cent to allow the Federal Government more room to make the minimum expenditure necessary to save the economy and the people.”
Tinubu also urged the central government to embark on emergency sustenance payments.
According to him, “with the fiscal latitude provided by lifting the budgetary limit, government can render emergency sustenance relief to most Nigerian households, especially the recently unemployed via cash payments.” He said this step would check hunger, maintain aggregate demand in the domestic economy and sustain private-sector markets.
“Directed towards the needy and modest households, such expenditure must be heavily weighted to local produce, not imports. This will help mute inflation,” the politician added. He noted that such payments could be done in either one or combination of three ways.
“First, we can designate a stipend for every household. The amount should be enough to pay for the monthly needs of an ‘average’ household for food and other basics,” the ex-governor stated.
Tinubu continued: “We could render some form of payroll support to companies and businesses that seek to retain workers albeit they may not be fully employed. The stipend could help companies stay in operation while maintaining workers on their payroll. By maintaining workers, the company can more swiftly return to full operation when normalcy returns.”
The APC chieftain also suggested the need for government to re-establish commodity boards for strategically important crops. He noted: “The agricultural sector is perhaps the least affected by this crisis. This is fortunate as it is the most important tool in mitigating the threat of widespread hunger. Yet the agricultural sector is still beset by uncertainty over prices and supply. To maintain adequate supply of food and ensure price stability, government should re-establish commodity boards for strategically important crops. These boards will specify a guaranteed minimum-maximum price range for these crops in order to maintain and stabilise farm incomes as well as consumer prices.”
