Use 10% of GDP as stimulus package, says Senate Leader

He gave the advice in a letter he wrote to the Federal Government on the measures to adopt to address economic challenges arising from COVID-19 pandemic.

Abdullahi addressed the memo to Vice-President Yemi Osinbajo, who is also the chairman, Economic Sustainability Committee and chairman, National Economic Council.

Titled: “Senate resolution on developing a post Covid-19 Nigerian economy”, the Senate Leader said the letter is his personal opinion and not an official communication from the Senate.

He added that the letter was informed by a motion he sponsored with the Minority Leader, Senator Eyinnaya Abaribe and co-sponsored by all the senators on April 28.

A resolution, he said, was unanimously passed urging the government to take steps to reshape the economy.

The Kebbi North senator noted that they agreed to urge the government to “use this grim period to change the trajectory and structure of the economy by appropriating at least 10 per cent of the Gross Domestic Product (GDP) as a stimulus package for investment in the country.”

He listed health and education infrastructures; agricultural value chains; solid minerals value chains; renewable sources of energy; petroleum industry value chain; infrastructure and public works (roads, railways, harbours, power, waterways and others as the areas the stimulus package should be applied.

Abdullahi highlighted investment on integrating research, science, technology, and innovation value chains and their application into agriculture, industry and manufacture.

He noted that the unanimous resolution has a lot of implication for national economic sustainability in the post COVID-19 era.

Said he: “Your Excellency will recall several instances in history when nations used periods of adversity, crises, post-conflict situations and uncertainties, to devise fresh economic thinking and action that launched them into economic development and prosperity.

“The great depression of 1929 and President Roosevelt’s New Deal in the US; post WWII initiatives and the Marshall plan that revived European, and particularly British, German, French and Italian economies into post-war expansion and prosperity; the Chinese experience after the failed ‘’Great Leap forward’’ of the 1950s and the ‘’Cultural Revolution’’ of 1968; the Meiji Restoration of 1868 and post-world war II reconstruction in Japan, and so on, are cases in point.

“We believe it is now time for Nigeria to jettison the neo-liberal economic thinking and paradigm that are based on balancing the budget; fighting inflation; curtailing social spending; reducing the role of government in economic matters; subsidising importers instead of producers; seeking stable exchange rates because of the economy’s externally driven supply orientation; maintaining high interest rates for domestic producers while subsidising importers with cheap foreign exchange; and so on.

“In place of these we must think out of the box and come up with a new paradigm with domestic production and consumption as the cornerstone of our economic policy.

“We must change the trajectory and dynamics of our economy from one run on the basis of crude petroleum exports and purchase of consumption items, raw materials and spares from abroad.

“This economic model has never worked anywhere. We have been on this paradigm and mode of economic thinking and its policy framework for more than 40 years, and nothing came out of it except underdevelopment, corruption, unemployment and misery for our people.

“The result is that successive governments have pursued an economic philosophy and policy direction that have consigned a population of over 200 million people in one of the richest countries in the world into poverty, destitution and seemingly unending political crisis and instability.

“What the unanimous resolution of the entire Senate of the Federal Republic envisages is a change of course in national economic policy and planning by bringing government back to the centre of economic affairs.

“This is to be facilitated by fiscal policies that are directed at stimulating growth by massive investment into the productive sectors of the economy – sectors with very little exposure to foreign currency demands; sectors whose requirements for raw materials, labour etc. will be sourced entirely from domestic suppliers and should not have up to 20 per cent exposure to foreign exchange requirements.

“The Federal Government should appropriate funds from the domestic capital bond market and other domestic sources for soft long-term lending at low interest rates to targeted producers and processors; large, medium and small scale operators in the various sectors identified but not limited to the ones indicated in the Senate resolution.

“This should be executed under a well-articulated and monitored stimulus programme to be strictly guarded and implemented over an initial five-year period. This can be subsequently extended as the economy expands.

“The programme implementation guidelines and strategies should be anchored by an Act of the National Assembly stipulating implementation, management guidelines and penalties against transgressions and deliberate implementation failures.

“This is the best way for the nation to come out of these crises in one piece and for the world to acknowledge that Nigeria has finally learnt its lessons and has finally decided to extricate itself from decades of morass and corruption.

“Your Excellency, I do sincerely hope that you will give this resolution and its contents the required attention.”