•Industrialists urge FG to launch economic stimulus plan
Onyebuchi Ezigbo in Abuja and Dike Onwuamaeze in Lagos
In line with its mandate of developing a template to manage the economy after the COVID-19 pandemic, the seven-man Economic Sustainability Committee headed by Vice President Yemi Osinbajo is to devise ways to protect jobs and also create new ones after the pandemic, THISDAY has learnt.
It was also gathered that the committee, which will meet today, has also recommended to President Muhammadu Buhari to approve the expansion of the COVID-19 palliatives to accommodate more Nigerians, especially those who rely largely on daily income.
Investigation revealed that based on the recommendations made so far by the committee, the federal government will roll out more measures to support the efforts at ensuring quick economic recovery in the midst of the twin challenges of dwindling oil revenue and the stifling impact of COVID-19.
A source close to the committee told THISDAY that the economic team is suggesting to government strategies to adopt to enable the country to absorb the shock of the unfolding harsh economic conditions.
One of the immediate targets, it was learnt, is how to prevent job losses while making efforts to create new ones.
Based on the recommendations of the economic team, the federal government will this week roll out more palliatives to help cushion the effects of the current lockdown in most parts of the country.
“The issue of the expansion of the palliatives through the review of the register used for conditional cash transfer to indigent Nigerians will form one of the key decisions to be taken at Tuesday’s meeting,” the source said.
THISDAY gathered that the Osinbajo- led committee now sits regularly every week to articulate policy measures to address emerging challenges due to the pandemic.
The source explained that the committee had commissioned a study to assess the level of job losses the country is likely to witness as a result of the pandemic.
“Their immediate target is to devise ways to keep existing jobs and create new ones now and post-COVID-19 era. They are also looking at what agriculture can do in the immediate future so that we can have enough food. They are considering how the agrarian drive can be further pursued to develop agro-based industries to produce processed food for export to earn foreign exchange and create jobs,” the source explained.
Speaking on what to do in the interim to cushion the impact of the lockdown on poor Nigerians, the source said the committee proposed further expansion of the various palliatives to take care of more persons not earlier catered for.
“They are recommending the expansion of the register of the poorest of the poor to accommodate more Nigerians, especially those who rely on daily earnings and this exercise is to be carried out urgently,” the source said.
According to him, the economic team is recommending a three-pronged approach in dealing with the economic challenges facing the country.
He identified the approach to consist of short, medium and long term measures, adding that the targets can be achieved with strong collaboration and buy-in of private sector players.
The seven-man economic sustainability committee was set up as a response to the recent challenges in the economic front resulting from the fall in the prices of oil in the international market as well as the disruptive impact of the pandemic that has disrupted the global economy.
The committee is made up of Ministers of Finance, Budget and Planning; Industry, Trade and Investment; Labour and Employment; Minister of State Petroleum Resources; CBN Governor; NNPC Group Managing Director and Permanent Secretary, Cabinet Secretariat who serves as secretary of the committee.
Industrialists Urge FG to Launch Economic Stimulus Plan
Meanwhile, industrialists under the Lagos Chamber of Commerce and Industry (LCCI) have called on the federal government to launch a post-COVID-19 pandemic economic stimulus process by enunciating policy measures and reforms that would facilitate economic and business recovery in Nigeria.
LCCI has also demanded the restructuring of commercial banks loan facilities to the private sector, the provision of palliatives to the aviation sector and the deregulation of the petroleum downstream sector.
In a statement issued yesterday and entitled “COVID-19: Business and Economic Sustainability Propositions,” the Director-General of the LCCI, Dr. Muda Yusuf, called on the government to provide tax breaks and concessions for investors and fiscal policy palliatives for the real sector of the Nigerian economy.
The LCCI observed that COVID-19 pandemic has raised serious concerns about economic sustainability and business continuity in the country after the pandemic.
It also noted that it has become imperative to commence a conversation about policy measures and reforms that would facilitate the realisation of desired economic outcomes after the COVID-19 era.
“The government should be the main driver of this stimulus process. This is done through the injection of liquidity or through policy measures that offer some accommodation that facilitates economic and business recovery,” the chamber said.
It explained that the launch of the economic and business recovery process has become urgent following the near-total derailment of business projections and the crystallisation of several risks in the economy as a result of COVID-19 interruption of economic activities in the country.
“Businesses have been grounded by the lockdown; the supply chains disrupted and aggregate demand depressed. Investment assumptions have collapsed across sectors. Businesses are faced with a force majeure and the shocks are profound and unprecedented.
“To save the economy from collapse, we need to salvage investments across all levels – micro, small, medium and large enterprises. “Without investment, we cannot have jobs; aggregate demand would remain weak; government revenue would be in jeopardy as tax revenue plummets and economic sustainability will be at risk. This underscores the imperative of an urgent rescue package for business to enable investors to ride out the storms,” LCCI stated.
It, therefore, urged the federal government to consider the suspension of taxes for investors in the health, agriculture, aviation, and hospitality sectors for at least one year.
The industrialists also requested for the extension of the filing of annual returns, including payment of due amounts to June 30, 2020, the unconditional waiver of penalties and interests of all outstanding tax payments and the temporary suspension of the implementation of the recently introduced 50 per cent increase in Value Added Tax (VAT) till the end of the year.
It also called for 50 per cent reduction in all taxes currently being paid by companies in manufacturing sector for one year as well as the suspension of the Pay As You Earn (PAYE) tax for a period of six months.
This, according to the LCCI, “would put some money back in the hands of the employees during this period to strengthen the purchasing power of citizens and stimulate output within the economy.”
The chamber also advocated that the “health workers’ PAYE should be suspended for one year in recognition of their role as front liners in the battle against the COVID-19 pandemic.”
The LCCI requested for a fiscal policy palliatives for the real sector that would ensure that the health sector’s raw materials and equipment should attract zero import duty in order to encourage more private sector investment in the sector.
In addition, it called for six months import duty waiver for manufacturers’ raw materials and intermediate products as the disruptions in the global supply chain has taken a heavy toll on the manufacturing sector.
Other reliefs it sought for the real sector included the request that the enjoyment of one-year import duty waiver for agro-processing inputs, the suspension of excise duty payment for manufacturers for one year and ensuring greater commitment of government and its agencies to the patronage of made in the Nigerian products.
These, according to the LCCI will facilitate the completion of ongoing projects by industrialists and encourage job creation.
“One key lesson of the COVID-19 is the imperative of domestic production and building capacity for self-reliance.
“Therefore, the government should create a strong monitoring framework to ensure compliance with the relevant executive order,” it said.
The LCCI also warned that the private sector’s indebtedness to the banking sector, which stood at N15.2 trillion as at December 31, 2019, would be “very crucial to the realisation of the economic and business continuity outcomes in the Nigerian economy” in the post-COVID-19 era.
“Banks should grant a one-year moratorium and six months interest rate concessions, effective from March 2020. To make this possible for commercial banks, we seek a review of the CRR from the current level of 27 per cent to 20 per cent. This would give room for the banks to offer these interest rate concession and moratorium on loans to investors,” the LCCI said.