The recent call by Professor Wole Soyinka for an emergency National Economic Conference seems to have prompted a reaction from President Muhammadu Buhari. Reports indicate that Buhari plans to convene a National Economic Conference in March, to address issues surrounding the current state of the country as the drop in global oil prices has had its effect on Nigeria’s oil-dependent economy. Coupled with depleted foreign reserves which has prompted the Central Bank of Nigeria to place bans on foreign exchange policies, this conference could not have come at a better time. There have been rumblings on social media that Buhari does not care or is ignorant about the country’s economic situation but, it seems this conference will allay those fears.
Here are three key issues that may be discussed at the National Economic Conference:
Federal Allocations and Foreign reserves
Due to the fall in oil prices, revenue from the sale of crude oil for Nigeria has reduced drastically. This implies that federal allocations to state governments have reduced excessively too. The federal government distributed about N629 billion to different states of the federation in January 2015. By the end of January 2016, that number has fallen by almost half to N370.4 billion, showing just how hard the Nigerian economy has been hit by the current oil crisis. An important part of the conference will be spent discussing how to find alternate sources for funds for state governments as well as to look for ways to increase states’ Internally Generated Revenue. Nigeria’s foreign reserves have also been severely depleted, prompting the CBN to implement stringent policies on foreign exchange within the country. There have been calls to devalue the Naira by different analysts, something the president has repeatedly ignored but he is expected to tell the nation why he has refused to devalue the Naira at this conference.
Foreign Businesses and Governments
One of the effects of the CBN’s tight Forex policy is its being debilitating on foreign-owned businesses in Nigeria. Some of these companies have already shut down and left the country, causing employee retrenchment. The president and his economic team will be discussing how CBN’s current stringent policies can be adjusted to secure the investments of these companies. The conference will also give different international economic experts the avenue to give presentations concerning how to revive Nigeria’s floundering economy.
Zero-budgeting and the Treasury Single Account
Upon his resumption in office, Buhari introduced a Zero-budgeting approach to Nigeria’s budgeting system and also merged all federal government accounts into a single account in the Central bank of Nigeria, called the Treasury Single Account. There was opposition to these changes from different angles, especially because it wasn’t something the Nigerian public system was used to. Many have also placed the blame on the whole 2016 budget fiasco on the zero-budgeting approach. Buhari and his finance team are expected to explain the rationale behind these changes to the key players in both the public and private sectors in Nigeria.