Monday, August 22, 2016 2.39PM / Research
The news headlines today was dominated by President Muhammadu Buhari’s request for emergency powers from the National Assembly to push his planned “stimulus” for the economy.
According to news reports from The Nation, “the objectives of the action-plan on the economy, which is in recession, include(s) shoring up the value of the naira, creation of more jobs, boosting foreign reserves, reviving the manufacturing sector and improving power”.
Government sources said the decision to seek emergency powers for the President was based on a proposal from the economic team headed by Vice President Yemi Osinbajo.
This is a long awaited reaction but one that falls short of acting as a stimulus even as it challenges the norm on the use of ‘emergency’.
According to reports, the economic team, having gauged the mood of the polity had decided that unless there is an urgency which some of the extant laws will not permit, “the recession may be longer than expected and Nigerians will not get the desired respite, which is the goal of this government”.
Rather than deal with the myriad of laws the economic team identified, one which the business community had long identified – most especially the NESG (see below); it has now sought a short-cut to getting some of the bills passed without doing anything about the laws in the first place. Invariably, it has simply sought to usurp the powers for law making with executive powers over a dubious emergency not well defined or properly articulated.
An executive bill titled: “Emergency Economic Stabilisation Bill 2016” is to be presented to the National Assembly when the Senate and the House of Representatives resume from vacation on September 12, 2016.
In the bill, the executive will be asking for the President to be given sweeping powers to set aside some extant laws and use executive orders to roll out an economic recovery package within the next one year.
President Buhari, according to reports, will be seeking powers to:
1. abridge the procurement process to support stimulus spending on critical sectors of the economy;
2. make orders to favour local contractors/suppliers in contract awards;
3. abridge the process of sale or lease of government assets to generate revenue;
4. allow virement of budgetary allocation to projects that are urgent, without going back to the National Assembly.
5. amend certain laws, such as the Universal Basic Education Commission (UBEC) Act, so that states that cannot access their cash trapped in the accounts of the commission (because they cannot meet the counterpart funding) can do so; and
6. to embark on radical reforms in visa issuance at Nigeria’s consular offices and on arrival in the country and to compel some agencies of government like the Corporate Affairs Commission (CAC), the National Agency for Foods Administration and Control (NAFDAC) and others to improve on their turn around operation time for the benefit of business.
According to the news releases “The extant law on procurement does not allow contract award earlier than six months after decision. Part of this is a mandatory advertisement of the contract for six weeks. The economic team has found this to be unacceptable, given our present circumstance. Although the president has the power to order the sale or lease of any government asset to raise cash, “the procedure is cumbersome and long”. The draft bill is meant to ease the process. The government source said about nine government assets may be leased or sold to generate around $50billion to shore up the nation’s foreign reserves and the value of the naira against the United States dollar.”
This posture is disingenuous at best and it undermines the very basis of governance as prescribed by our democracy. If allowed, it negates the very process of law making and resolution of how things ought to be done, no matter the circumstance – except in the case of a declared national emergency; one that is yet to occur giving the posturing and denials of the same government that we are in an emergency.
Examples abound the world over of how governments have had to deal with the following;
• Bureaucracy and red tapes in laws (see US Bill Clinton approach to red tapes and more recently, Saudi Arabia)
• Changes in laws and trade/procurement agreements
• Changes in use of budgeted funds i.e. appropriation amendments;
• Policy changes done via trade, tariffs and tax adjustments; and
• Use of funds outside the norm passed through a self-accounting and self-funding scheme.
The challenges are real and while there remains a justification for a quick and precise action, asking for powers to circumvent the very basis of our democracy does not appear logical and rational. The government must get down to doing the real work required in selling its stimulus plan based on a sense of urgency that compels changes to the laws that holds the country back and draws it further down at a time like this.
This bill as proposed will allow the government declare a state of emergency…..yet the more plausible explanation will be applicable in three cases:
• The first permissible scenario is a war emergency, where the sovereignty, security and territorial integrity of Nigeria is threatened through external aggression or armed rebellion.
• The second is a public emergency or calamity; and
• The third is a financial emergency, during which the country’s financial stability or credit is threatened.
The government has not admitted to any of the three scenarios above and hence raises the question as to the basis of the emergency powers sought.
Nigerians are paying a sacrifice for this non admission of a serious national crisis and must therefore wonder why and what this emergency really seeks to address and for how long; even as they expect the leadership to do its own share as well – being upfront with it and selling its stimulus plan as a confidence boosting measure.
1. Buhari seeks emergency powers to tackle economy - The Nation Nigeria – Aug 22, 2016
2. Comprehensive Review of Legal Instruments affecting Business in Nigeria – Mar 21, 2016
3. Summary of Legislation by Priority Ranking
4. NASS, NESG and Development Partners hold crucial Business Environment Roundtable
5. Senate wants a Quick Privatization of Nigeria's Railway Sector – Jul 08, 2016
6. Increase in Monthly FAAC Payout is Alright for Some States
7. Productive Activity Contracts More Slowly in July
8. LBS Executive Breakfast Session - August 2016 (Policy Daunting, Markets Uncertain, Citizens Groan)
9. Gross Official Reserves Decline by US$150m in July 2016