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|Post Covid19 Economic Renaissance: Necessary Fiscal And Monetary Ammunitions by Shauntvglobal: 4:00pm On May 05, 2020|
Pastor Isaac Sunday ADELUGBA, a Chartered Accountant, Economic Analyst and Senior Pastor of God's Power In Action Evangelical Ministry shares his thoughts in this second Policy Write up
"Our sense of nationalism driven by patriotism and the fact that Nation Building is a work in progress,we need robust interaction to effect economic change, growth and development. The return of Abacha 111 loot that I read today and desire to commit same to projects such as Lagos-Ibadan road, Second Niger Bridge and Abuja-Kano road to be closely monitored by civil society organizations will have multiplier effects on the economy and produce other salutary effects. We need to use adversity to device actions that can push us forward as a nation. We read about the great depression of 1929 and the New Deal policy of Roosevelt and the Marshall Plan that revived and developed Europe after World War 2. This pandemic is another war. We need to design policy that encourages domestic production and consumption to survive and prosper. In a world of techo- economic and health disruption and dislocation, we need a package of policies for sustainable development, prosperity and growth.
Some of the steps that we can take to ensure economic survival include:
1 PAYROLL SUPPORT FOR COMPANIES BADLY HIT BY THE PANDEMIC.
There is need for emergency support funding. There is need for government direct intervention on direct wage by at least 40% to 60% for the next five months. This will help the survival of businesses and help to avert job lossThis
2 FISCAL PRECAUTIONARY MEASURES: Businesses need short term liquidity to meet their needs. It's obvious that the economic consequence of the pandemic will be severe and our country Nigeria, being emerging market and developing economy must act swiftly by granting tax deferrals and short- term work schemes like recruitment of 1000 people per local government to work on specified government programs.
3 AIR TRANSPORTATION: The survival of global air transportation is precariously hanging in the balance. The industry is in the throes of an unprecedented crisis. Virgin Atlantic has fired more than 3000 workers including 600 pilots. Finnair returned 12 planes and laid off 600 pilots .They are devising a raft of measures such as pay/ job cuts to navigate the unprecedented crisis. The local air transport industry is in critical condition. Indigenous airlines have been adversely hit by the effects of COVID19. There is loss of revenue from ticket sales,cargo operation. The Federal Government should consider a stimulus grant or palliatives to cushion the negative effects of COVID19.
4 RESURRECTION OF KEYNESIANISM: The people at corridor of power should embrace the ideas of John Maynard Keynes ( 1883-1946) that formed the bedrock of Roosevelt New Deal. Government spending is very critical to help the economy now. Government should be at the vanguard of economic stimulus policies. Stagnant economies afflicted by low levels of aggregate demand requires that government through expansionary economic particularly fiscal and monetary policies by increasing government expenditure, lowering the interest rates will enable people have more disposable income. Fiscal interventions had been heavily used to bail out banks. We must not embrace the Neo- liberal policies of Thatcher and Reagent that see such intervention as wasteful. This is the poison the Multi lateral Financial institutions often imposed on us I.e to cut expenditure on social spending. This has caused dilapidated infrastructure in developing economies. Economic policies conceptualization, articulation and implementation must be dynamic not static.
5 RESURRECTION OF DEAD CAPITAL IN REAL ESTATE: This is a medium to long term issue. Properties become dead when there is no valid papers conferring ownership to the owners due to lack registration with government authorities hence the property cannot be transferred. Many Nigerians and families from Lagos to Sokoto and from Maiduguri to Port Harcourt have large expanse of land that are worthless because there are no legal papers backing them. Bringing dead capital estimated at $900billion can turn the economy around. Government must reduce the cost of registration to unlock and leverage on the large land property to grow wealth in the economy. Hence we must be careful not to sell our land to Chinese and Indians.
We must look inward in our production and consumption pattern. Focus on production that requires little FOREX so that Nigeria can confront the challenge of industrialization by focusing on our rich endowments."
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