Says Benchmark should be reduced to $20pbl …You can’t lockdown indefinitely …Where is protocol for re-opening economy? By Emma Ujah, Abuja Bureau Chief
Former Chief Economic Adviser and Chief Executive Officer (CEO) of the National Planning Commission, Prof. Magnus Kpakol, has called for better coordination of Nigeria’s fight against the coronavirus pandemic.
Speaking in an interview with Vanguard, yesterday, he observed that fight against the pandemic, especially with respect to saving livelihoods in the country lacked proper coordination, requiring an urgent action to save the nation’s economy from the coronavirus consequences.
According to him, “There are two sides to the fight against the coronavirus pandemic. There is the fight to save lives and there is a fight to save livelihoods. There is no proper coordination of the Economic side of the COVId-19 pandemic –which is the livelihood. We are copying people who have large sums of stimulus running into trillions of dollars. The vice president should be made to head the economic stimulus, aspect of the fight against the pandemic. “When the governors said they could not reach the president, they had to write a letter to the SGF. I don’t care whether it is the SGF who has to head the economic team, SGF is smart enough but there should be a better coordination. While the Presidential Task Force (PTF) headed by the SGF concerns itself with how to save the lives of Nigerians, by doing everything necessary to contain the spread of the virus; providing data, equipment, and all necessary medical products to ensure and early defeat of the virus in the country, there must a team to focus on minimizing the economic impact of the pandemic on the people. “In my view, the Vice president who is in charge of the economy must be brought on board in this respect. He should have a Think Tank that can think through concrete steps to be taken to mitigate the effects of the COVId-19 on our economy. “Right now there is a lockdown in the country. Remember that the MSMEs constitute about 80 per cent of the companies in the country and play a significant role in providing jobs while accounting for well over 50 per cent of our economy. Where is protocol for re-opening the economy? The former Chief Economic Adviser queried the absence of a protocol for re-opening the economy, after the lockdown. He argued, “You can’t lockdown the nation indefinitely. According to him, after almost a month of lockdown, there federal government should have, by now, come up with a protocol on how to restart the economy.” He also lamented that inadequacy in the coordination of the pandemic in the country was evident in the fact that there is not enough mobilization at the grassroots. Prof. Kpakol opined that Local Government Authorities should have been sufficiently mobilized to be part of the fight against the pandemic, “because they know the people in their domain who could also be mobilized to make donations into a pool of funds to assist the very poor members of their communities.” In addition, he said that what the federal government could do in such a situation should have been to match such funds and that, by doing so, the palliatives would get to all those who genuinely deserve them. “We are talking about commercial drivers, vulcanisers, barbers, tailors, hair dressers , plumbers and such other artisans. These people are locked down at home. What is the palliative for people in that category? “The money that the Minister of Humanitarian Services has been going about, giving out to people is conditional cash transfer. It is a different programme altogether. I was the one that introduced it (as National Coordinator of the National Poverty Eradication Programme), many years ago. It is not the same as direct COVID-19 palliatives to the people in order to cushion the effects of the lockdown on the people.” He said the current random hand-out of cash would not be effect because the federal government had no accurate data on poor people in the country. Budget should be reviewed to $20pbl The former CEO of the National Planning Commission noted that the reviewed $30 per barrel was not sufficient, given the market realities, where oil prices have fallen far below that benchmark. He suggested that the federal government should review the benchmark downward further to about $20 pbl. As at yesterday, Brent Crude was $21. 44, while OPEC Basket price was a mere $15.23 pbl, way below production cost in the country. Prof. Kpakol said that there was no guarantee of oil price rebound in time soon because of the effects of the pandemic on global economy. He said that it could take up to the end of the year for oil prices to pick up to $30pbl and that, without a further downward review, the budget deficit could overtake revenue of the government in the fiscal year. “You cannot review budget every day, as oil prices move. But with a benchmark of $20pbl, you can comfortably say, if there is an increase, this is what to do in that scenario. This is how to accommodate the extra that comes. It is better to have a benchmark that is below oil prices than a benchmark that you are not sure of realizing it. It will put a strain on the budget implementation.” How to fund fight against COVID-19 On how to fund the fight against the COVID-19 Pandemic in the country, Prof. Kpakol said “There have been donations by the Nigerian private sector operators, led by the Central Bank, Dangote, Otedola, Adenuga and the like, the European Union donation and several other contributions from other organizations, the federal has applied for its $3. 4 billion contributions to the International Monetary Fund. “Apart from the above, the federal government may have to borrow or pursue the debt relief like other African countries in other to free funds to be able to fight the pandemic.”