Stakeholders task ministers on nation’s economic recovery

STakeholders in the financial sector may have
raised the stake for the newly appointed
ministers, as they prescribed performance-driven
initiatives that are devoid of mere head
knowledge, but an understanding of the
economy’s challenges as a benchmark.
The stakeholders, who harped on the need to hit
the ground running on isssues relating to foreign
exchange, real sector support, interest rates, and
liquidity management, also called for flexibility in
reversing any assessed unwholesome policy.
A former banker, chartered insurer and Chief
Executive Officer of Brickred Consult Limited, Dr.
Dan Okehi, said to achieve desired goals, the
President should immediately constitute an
economic team.
According to him, the team members should
include tested individuals, even if it means
recruiting old hands, to assist the Finance
Minister, especially as some of the ministers are
“green horns” in that level.
He said that the revamping of the economy
should take precedence, while some controversial
policies so far threatening the micro and macro
economic stability of the system should be
reviewed.
Okehi noted that the banking system is quietly
collapsing through liquidity tightening from the
Treasury Single Account, among other policies,
adding that while the measure is good to an
extent, there might be a better way to tackle it
and allow the banks the needed liquidity to
operate.
The insurer also said there is need for human
capital re-engineering, raving up of productive
activities through enabling frameworks and
viable ideas, as well as shunning the call for
devaluation of the naira in its entirety.
The Managing Director and Chief Executive
Officer of Cowry Asset Management Company,
Johnson Chukwu, said the improving growth
should top the priority list of the cabinet.
Chukwu said that reducing poverty level through
an effective redistribution of national wealth is
needed now than ever, noting that government
must take a definite stand on the issue of subsidy,
which has become a drain for the economy.
According to him, to impact positively on citizens,
the new Finance Minister must now show
visionary leadership by initiating programmes
that would touch directly the poor, whom the
subsidy argumement is riding on their back.
“We must begin to get our budgeting process
right, moving away from the high level recurrent
expenditure and neglect for the real and
mortgage sectors that would impact more on
citizens.
But the Centre for Social Justice (CSJ), which
welcomed the long awaited inauguration of the
Executive Council, drew attention to what it
described as “pertinent issues and concerns” on
two key ministries- Budget and National Planning
and Power, Works, and Housing.
The lead Director of CSJ, Eze Onyekpere, noted
that the movement of the Budget Office of the
Federation to National Planning as a full ministry
makes it imperative to amend some laws that
gave specific tasks regarding budget to the
Minister of Finance, in favour of the new
ministry to be able to proceed with his duties.
The first is the Fiscal Responsibility Act (FRA),
which assigns inter alia to the Minister of
Finance, the task of: Preparing the Medium Term
Expenditure Framework (MTEF); collection of
estimates of revenue and expenditure of
scheduled corporations; preparation of budget
disbursement Schedule; powers related to
virements and restriction of budgetary
commitments; budget reporting obligations based
on monitoring and evaluation; and the
attainment of fiscal targets.
“The second is the Finance (Control and
Management) Act, which vests the power of
preparation of budget estimates on the Finance
Minister, who presents same to the President for
approval before it is laid by the President before
the National Assembly (NASS),” he said.
Onyekpere noted that by merging ministries of
Power, Works, and Housing, government has
created a ‘super’ ministry that may make or mar
the administration.
“The challenges in that sector are enormous and
could take the full time of a Minister and
Minister of State, adding that the President still
has the opportunity in these early days to split
the ministry and appoint more ministers.
The “pruning and merger” of some ministries, as
expected, aligns with the objectives of the
government to reduce administrative overheads
to conserve resources, which already has fallen to
a 30.7 per cent year-on-year decline (to N3.5
trillion) accruing to the federation account in the
first half of the year.
“Although we are moderately bullish on
personalities of the ministers to drive policy
initiatives, the fact that the appointments were
delayed for five months in a period of
deteriorating macroeconomic fundamentals has
set expectations high for them.
“Important policy decisions lie ahead and the
market would expect the Finance Minister to
work out a co-ordinated policy framework along
with monetary authorities to respond to the
macroeconomic challenges of slow growth,
heightened inflationary pressure, declining
reserve buffers and exchange rate uncertainty,”
the Head of Investment Research at Afrinvest
Securities Limited, Ayodeji Eboh, said.
According to him, the market now is waiting to
see how the current CBN’s strategy will be
balanced with the expected expansionary fiscal
2016 budget.
“The market awaits a plethora of signals for a
major turnaround in sentiments for equities,
chief of which would include, optimal pricing of
foreign exchange rate, clearer fiscal policy
direction and reinstatement of investor
confidence in monetary and fiscal policy
managers,” he added.
But Onyekpere added: “The idea of saving money
by merging Ministries may not hold water if the
administration lives up to its anti-corruption
posture. The annual basic salary of a Minister
under the Certain Political, Public and Judicial
Office Holders (Amendment) Act No.1 of 2008 is
N2,026,400.
Adding the allowances and perks of office will
now bring the yearly emoluments of Minister
beyond N30 million. Forty ministers at this level
of emoluments will still be about N1.2billion,
which will not be above the affordability limit for
the country.”