Tinubu advises Fed Govt on how to fix economy

BEFORE a colourful crowd of dignitaries, former Lagos State Governor Bola Tinubu yesterday advised the Federal Government not to increase the Value Added Tax (VAT).

To the All Progressives Congress (APC) stalwart, a new VAT regime will increase the burden of Nigerians. What should be done, he said, is to widen the tax net for more people to pay.

The Federal Government has said there are no plans to increase VAT from five per cent.

Tinubu noted that the time had come for Nigeria to look inward and initiate people-friendly policies. He warned that there were clear indications of the global economy gradually going into recession.

According to him, forecasters have been predicting that the global economy will go into recession within the next 12 to 18 months.

The audience applauded as Tinubu spoke. It was all at the 11th Bola Tinubu Colloquium at the International Conference Centre (ICC), Abuja in commemoration of his 67th birthday.

He advised the government to revisit the privatisation of the power sector for a faster industrial development and job creation. Besides, said Tinubu, estimated billing should stop.

He said: “I want to appeal to Prof Yemi Osinbajo, the Vice President and his team to put a huge question mark on any increase on VAT. If you reduce the purchasing power of the people, we can further slow down the economy.

“Let us widen the tax net. Those who are not paying now, even if they are relatives of Bola Tinubu, let the net be bigger and we take in more taxes. That is what we must do in the country instead of another layer of taxes, for now.”

Speaking on the need to industrialise the country, Tinubu said: “We require serious and bold reforms to achieve this. What is happening to our gas pipelines? Whatever we have to invest now for our future is a task that must be done boldly. The PDP administration shared out generation, distribution and transmission to their friends and cronies without very deep and thoughtful research and evaluation.

“It has now become pork chops. This privatisation must be revisited. Put experts together for a more constructive reform to improve generation, transmission and distribution by any means necessary. We cannot afford to be too legalistic about this.

”We should push to end the practice of billing people for electricity they never received. This practice is a vestige of the past that should not accompany us into the future.  A person should be charged accurately and only for the power that they use.

“Government should continue to aggressively implement its national infrastructure plan. We must commit ourselves to a national highway system linking our major cities and towns, our centres of commerce, with each other. This will save lives, spur commerce, cut costs and bring Nigerians closer together.”

The co-Chairman of the APC Presidential Campaign Council stressed that the “Next Level” campaign slogan of the ruling party was not just a campaign jargon that should be discarded after the victory.

He said: “The Next Level is not just a trendy campaign phrase to be quickly discarded once victory has been achieved. It has a much deeper and more profound meaning, perhaps even more than its authors contemplated. This is because we are a nation still in the process of defining itself politically and economically.

“In this process, it is tempting and easy to borrow indiscriminately from those nations that seem to have mastered the art of democratic governance and to have achieved economic prosperity. However, to achieve durable progress, we can’t afford to work hard but in mindless devotion to the ways of other nations.

“This truth is particularly acute when these very nations now face fundamental political and economic questions that cast doubt on the social utility and viability of the economic model under which they have travelled for the past 50 years.”

He told the gathering that the global economy was facing stiff headwinds as “factors that are not of our making now cast the world economy towards low growth”.

“Consumer spending is slipping. Aggregate private debt has attained historic levels. America and China are in a trade tug-of-war. Brexit is imminent. Whatever form Brexit takes, economic dislocation will emerge from the political confusion now underway.

“Even without Brexit, the EU itself has entered a rough patch. The Eurozone may already be in recession. Stock markets experience wild swings that speak to an underlying weakness and pessimism about the immediate future.  Forecasters are predicting a global recession within the next 12-18 months.

“I render these observations not to frighten anyone, but because they ring true. Wisdom requires that we accept reality instead of obscuring it under the cloak of wishful thinking. We must build policies that interact with the world as it is, and not with the world as it should be.”

In Tinubu’s view, Nigerians must recognise these harsh economic tidings as advance warnings to the wise and those at the helm of affairs “must think deeper and work harder for our people in Nigeria”.

Tinubu said: “I would be a most wicked friend if I knew a storm was approaching yet convince you to ready your family for an outdoor picnic under the tallest tree. The truth is always a more valuable guardian than fantasy.”

He went on: “Nigerians must recognise a fundamental truth of our time. The economic model upon which the world is built is unravelling. The coming downturn is just a symptom of this great upheaval. The global economy faces either genuine reform or gathering ruin.

“Because of this, the economic cohesion of Western nations is weakening. Income inequality has reached levels unseen in a century. The middle class in most countries is shrinking. Wages stagnate while prices are on a ceaseless march upward.

“People the world over are questioning the centre-right conservative model that has, with few exceptions, governed the world for the last half century. In one form or another, people are protesting the way things are, and progressive politicians are trying to help the people change things for the better.”

The Next Level, he said, must be seen as part of this global and historic dynamic. “Our pursuit of the Next Level cannot be achieved by blindly following the economic path of other nations. That would be tantamount to racing to live in a building just as its long-term occupants were frantically rushing out, screaming that the edifice was crumbling.  If we are smart, we dare not enter.

”Instead, we must construct our Next Level on a progressive ideology and vision that will take our people out of penury, diversify our economy more aggressively, and empower and retrain our youth.

“To be the great nation we purport to be, we must reform and retool our economy according to our definition of what is best for our own people. We cannot assign that duty to anyone else. We must do more than simply work for the people.

“The government must ‘work for the people in a way that enables them to better work for themselves. We must amend our basic ideas about the economy.  We must divorce ourselves from our fixation with GDP rates and similar statistics. These things were initially intended to be indicators, suggestive measurements.

“However, we have misinterpreted these road maps by treating them as if they were the destination itself. This has caused us to distort the organic relationship between the people and the economy.

“This dominant train of thought has made the people servants to the dictates of abstract economic theories. In a more effective system, the economy would be fashioned to serve the concrete needs and legitimate aspirations of the people.

“Our economy must be redefined to be an efficient yet moral social construct with the primary goal of optimising the long-term welfare of the people through the sustained, productive and full employment of labour, land, capital and natural resources.

“In the current global context, the best translation of laissez faire economics is ‘let’s stay poor’ economics. To believe that we are at our best when everyone focuses solely on maximizing their own position is to believe that one hundred hands can clutch at the same naira note but no one will get scratched.

“To pull the nation from poverty, government must play a decisive role. It must at times direct and even develop markets and opportunities. This is nothing novel. I am only restating what the established economies did when they were young and assumed their trajectories toward growth.”

Tinubu believes that in its second term, President Muhammadu Buhari administration will dedicate itself to changing the very structure of our economy for the better. The single most important sector for the government’s focus is infrastructure, the most important of which is power, according to the former governor.

Tinubu argued that affordable and reliable power will drive industrialisation that can provide jobs and produce goods for Nigerians and take the people out of the dark ages and bring the nation into the light of a better day.

He went on: “I believe the Buhari administration will work to increase electricity generation, transmission and distribution by more than 50 percent within the next four years.

“In working to transform the face of our economy, government must also enact policies that encourage industrialisation and modern agricultural practices. We must applaud President Buhari for the historic innovations made in the agricultural sector.

“We must further encourage him to do even more. Government funded social security for the aged and government backed affordable housing and mortgage facilities are things we must continue to explore in an aggressive manner.

“In the end, our future is uncertain until we enter it and make of it what we will. We can either let the future happen to us or summon the courage to make the future belong to us as other nations have done. I don’t think we really have a choice in the matter. We must take the people to the next level. It is a promise made and thus a promise that must be kept.

”Our goal is nothing less than enabling the people to enjoy lives free of penury and lack. We seek to constitute a nation where all have basic sustenance and sufficient food on their tables, a sturdy and sheltering roof over their heads and the fair chance and means to sustain and further enrich their lives as they see fit.”