Post by olukumi on Feb 21, 2016 11:49:57 GMT
Here are some of my thoughts in early January to help with our current precarious economy. It wont fix the problems, but it will alleviate pain and suffering.
Some points have been adopted and I have also had a change of heart on other points. I'll do a different version for how I feel end of February.
Here goes:
We are a victim of a mono product commodity export based economy and when prices tank, then so is our fortune and currency. We had a boat load of opportunity under the last government to structurally change our economy by building infrastructure and diversifying our exports. But we blew away the days of oil at $140 a barrel. That was lost on private jets and ridiculous properties.
Anyway, accepting our reality let's look at what will alleviate the pain.
Monetary policy - CBN (Emefiele)
1. Devalue the naira and stop wasting reserves on our ego. Naira is not worth the official rate and let's be done with that reality. Of course, inflation will rise, which is inevitable.
2. Lower interest rates. This is to make the cost of borrowing cheaper, so more naira is available to spend to keep a buoyant economy. The banks won't enjoy runaway profits but they can make up for that in fees.
3. Stress test the banks and based on the results, recapitalizate the banks. We can't afford to have weak banks that'll collapse anytime soon. If the banks are not strong enough to do real banking, then consolidate them.
4. Formulate policies for banks to increase retail lending which will grow the economy when money is available to individuals to invest in businesses and other entrepreneurial activities such as farming. We have 160 million people and can run a growth based economy internally.
5. Put more import tariffs on frivolous goods to encourage local production.
6. Prioritize the issuance of forex to companies importing industrial or agricultural machines. Anything that will foster local production should be encouraged. This will get us from being a net exporter of raw goods to a net exporter of processed or semi processed goods.
Fiscal policy (Adeosun)
Kemi is already doing most of my recommendation
1. Look for ways to seal all the leakages in parastatals.
2. Retrieve every single kobo of revenue made by government agencies which will include customs, ports, waec, jamb etc etc
3. Review the cost of governance with the aim of drastically lowering recurrent expenditure. This may involve firing redundant people.
4. Review our VAT. We have a low tax rate and we need to tax consumption of foreign goods to discourage our dependence on them.
5. Broaden the tax base with targeted taxation across the economy. Anybody with a stall or farm has to pay taxes. No exceptions.
6. Automate governance using technology. We need an ERP solution and data warehouse. This will give easy access to information and reports so we can plan and make better policy decisions.
7. Review fee structure across the board. This will include police tickets, traffic tickets, tolls, road tax etc etc
Buhari
1. Communicate a vision and hire an economic adviser that can articulate the vision as concrete plans with milestones.
2. Go after trade agreements with African countries. We have a lot to sell the less developed African countries and can effectively replace a lot of their foreign partners. This will increase dollar repatriation from the revenue we make in those countries.
3. Stop speaking so negatively about Nigeria. You kill consumer and investor confidence when the head of state sounds so negative.
4. Fight corruption but don't let it take center stage of your government. It just shows you're not capable of managing a complex country with varying priorities.
5. Strengthen our defense. It's your #1 priority as commander in chief.
6. Go get a communication coach to teach you the art leadership using verbal and non verbal cues.
NASS
1. Pass PIB bill as a matter of urgency.
2. Pass any bill that will clear roadblocks and speed up the incubation of businesses. Example. Why does it take a year to get mining license? There are other examples.
3. Do real work and pass laws that will help the common man and big business. They go hand in hand
The People
1. Work hard, pray hard and party hard.
Some points have been adopted and I have also had a change of heart on other points. I'll do a different version for how I feel end of February.
Here goes:
We are a victim of a mono product commodity export based economy and when prices tank, then so is our fortune and currency. We had a boat load of opportunity under the last government to structurally change our economy by building infrastructure and diversifying our exports. But we blew away the days of oil at $140 a barrel. That was lost on private jets and ridiculous properties.
Anyway, accepting our reality let's look at what will alleviate the pain.
Monetary policy - CBN (Emefiele)
1. Devalue the naira and stop wasting reserves on our ego. Naira is not worth the official rate and let's be done with that reality. Of course, inflation will rise, which is inevitable.
2. Lower interest rates. This is to make the cost of borrowing cheaper, so more naira is available to spend to keep a buoyant economy. The banks won't enjoy runaway profits but they can make up for that in fees.
3. Stress test the banks and based on the results, recapitalizate the banks. We can't afford to have weak banks that'll collapse anytime soon. If the banks are not strong enough to do real banking, then consolidate them.
4. Formulate policies for banks to increase retail lending which will grow the economy when money is available to individuals to invest in businesses and other entrepreneurial activities such as farming. We have 160 million people and can run a growth based economy internally.
5. Put more import tariffs on frivolous goods to encourage local production.
6. Prioritize the issuance of forex to companies importing industrial or agricultural machines. Anything that will foster local production should be encouraged. This will get us from being a net exporter of raw goods to a net exporter of processed or semi processed goods.
Fiscal policy (Adeosun)
Kemi is already doing most of my recommendation
1. Look for ways to seal all the leakages in parastatals.
2. Retrieve every single kobo of revenue made by government agencies which will include customs, ports, waec, jamb etc etc
3. Review the cost of governance with the aim of drastically lowering recurrent expenditure. This may involve firing redundant people.
4. Review our VAT. We have a low tax rate and we need to tax consumption of foreign goods to discourage our dependence on them.
5. Broaden the tax base with targeted taxation across the economy. Anybody with a stall or farm has to pay taxes. No exceptions.
6. Automate governance using technology. We need an ERP solution and data warehouse. This will give easy access to information and reports so we can plan and make better policy decisions.
7. Review fee structure across the board. This will include police tickets, traffic tickets, tolls, road tax etc etc
Buhari
1. Communicate a vision and hire an economic adviser that can articulate the vision as concrete plans with milestones.
2. Go after trade agreements with African countries. We have a lot to sell the less developed African countries and can effectively replace a lot of their foreign partners. This will increase dollar repatriation from the revenue we make in those countries.
3. Stop speaking so negatively about Nigeria. You kill consumer and investor confidence when the head of state sounds so negative.
4. Fight corruption but don't let it take center stage of your government. It just shows you're not capable of managing a complex country with varying priorities.
5. Strengthen our defense. It's your #1 priority as commander in chief.
6. Go get a communication coach to teach you the art leadership using verbal and non verbal cues.
NASS
1. Pass PIB bill as a matter of urgency.
2. Pass any bill that will clear roadblocks and speed up the incubation of businesses. Example. Why does it take a year to get mining license? There are other examples.
3. Do real work and pass laws that will help the common man and big business. They go hand in hand
The People
1. Work hard, pray hard and party hard.
