…As Experts tell Buhari: Remove petrol subsidy, cut interest rates***
The Independent National Electoral Commission is expected to
spend over N1.9bn on legal fees and related matters as aggrieved candidates
challenge the outcomes of various elections in court.
Atiku, a former governor of Akwa Ibom State, Godswill
Akpabio, and others have already challenged the result of the elections in court.
The information is contained in INEC’s 2019 Election Project
Plan which was obtained by The PUNCH.
The document reads in part, “N1, 796, 547, 500.00.
Professional fees and expenses for external solicitors to be engaged by the
commission to represent it at the tribunals and appeals; honorarium for legal
officers that represent the commission at election petitions and appeals.
“Analysis of fees: Governorship petition at N4.5m X 20;
senatorial petition at N3m X 45; House of Reps atN2.7m X105; state House of
Assembly N1.350m X 244. Honorarium to in-house lawyers is seven per cent of
fees payable to external solicitors.”
Of the sum, N6m was spent on pre-election cases which are
disputes that arose from the conduct of party primaries.
The commission will also spend a separate N26.5m on
monitoring the hearing of election petitions and appeals across the 36 states
and the FCT.
The sum will cover duty tour allowance and transport costs
for the monitors at the hearing of election petitions and appeals as well as the
compilation and printing of reports of petitions and appeals.
The electoral umpire also budgeted a separate N99.5m for the
compilation and production of updated electoral legal framework including the
code of conduct for external lawyers and code of conduct for staff.
A separate N25m will be spent on the prosecution of
electoral offenders.
Yakubu had revealed in January that the commission battled
1, 134 legal cases arising from election disputes in 2015, 2016 and 2017.
He added, “In the course of discharging our
responsibilities, no public institution in Nigeria is subjected to more
litigation than INEC. Over the last two years (2016 and 2017), the commission
has been involved in 454 court cases in addition to 680 cases determined by the
Election Petitions Tribunals arising from the outcome of the 2015 general
elections, making a total of 1,134 cases so far.”
In another forum, Yakubu said no government agency in the
country had been taken to court more than INEC because every aggrieved
candidate would join the commission in almost every suit.
In the meantime, foreign and local economic experts have
said President Muhammadu Buhari should put at the top of his second-term agenda
the removal of petrol subsidy as well as the reduction of interest rates in a
bid to stimulate investments and economic growth.
Experts at Agusto & Co Limited, a credit rating agency,
said in a report on Tuesday that the country “is currently in a dire fiscal
strait and the numbers are quite grim.”
“For instance, despite the positive spin about Nigeria’s
benign debt to Gross Domestic Product currently around 20 per cent, interest
payments as a percentage of revenue are over 60 per cent,” they said.
The Lagos-based rating agency said Buhari’s government would
have to work to raise revenue while also restructuring government spending.
It said, “All options on the table for Mr Buhari in his last
term are hard choices with no easy way out. For instance, Nigeria’s current
fuel subsidy regime indicates the country may have re-adopted opaque practices
of the past that not only create a huge fiscal hole but a morass as well.
“With subsidy payments probably in the range of
N1.2tn-N1.3tn annually, the country is obviously hemorrhaging especially amidst
the steep opportunity costs. Mr Buhari will not only have to stop this fiscal
hemorrhage but also muster the political will to deregulate the downstream
petroleum industry once and for all.”
According to Agusto & Co, some of the big issues that
will make or mar Buhari’s economic records will be the management of subsidies
and other cost-unreflective tariffs being stifled by price controls.
“These reforms will require the removal of subsidies on the
pump price of petrol, allow market forces to determine the domestic price of
natural gas, allow electricity tariffs that enable operators to earn margins on
their costs and also ensure exchange rates reflect fundamentals. These reforms
could help stimulate investments across the board and unlock economic growth,”
the experts added.
They said the Buhari administration should seek to improve
efficiencies in the economy by concessioning key infrastructure and eliminating
monopolies of state-owned enterprises in key sectors such as aviation (airport
ownership and management), railway and electricity transmission by opening up
the sectors to private sector investments.
The Global Chief Economist, Renaissance Capital, Charlie
Robertson, in an emailed note on Tuesday, said Nigeria would require a doubling
of oil price or industrialisation to achieve real per capita GDP growth of four
to six per cent (i.e. headline GDP growth of seven to nine per cent).
He said, “Without it, per capita GDP growth may be around
zero per cent, which implies headline GDP rising at roughly three per cent
annually.
“To achieve industrialisation, Nigeria needs to raise the
adult literacy rate from 60 per cent to 70-80 per cent – which we think can
happen from 2024 onwards; treble electricity consumption – which we assume
requires at least a doubling of the electricity tariff, and double the
investment rate from 13 per cent of GDP to 26 per cent of GDP – or triple it,
to match what Ethiopia is doing.”
Robertson added, “To double the investment rate, we suggest
that reforms may be needed, like removing the implicit fuel subsidy that costs
about 0.5 per cent of GDP. It supports consumption and not investment.”
He said the government should “boost domestic savings and
bring down interest rates which will probably require a smaller budget deficit
and higher taxes, and encourage foreign direct investment, which in 2018 fell
to $2.2bn, according to the United Nations Conference on Trade and Development.
“Ghana got $3bn. To match Ghana (per capita), Nigeria should
be getting $24bn a year. A change of approach to MTN, the oil majors and others
may be required.”
According to Robertson, the naira should be allowed to trade
closer to fair value, estimated today at N440/$, N470 by year-end and N670 by
end-2023.
“Allowing faster currency depreciation does partly contradict point 3 on cutting interest rates,” he added.
Punch