Nigeria needs an economic advisory council alive to its responsibilities

The recent statement credited to the Presidential Economic Advisory Council (PEAC) advising President Muhammadu Buhari to abolish subsidy on petrol and implement a pricing regime that represents the cost of the product could be best described as a bolt from the blues.

Since the council was established in 2019 to replace the regime’s disbanded Economic Management Team headed by Vice-president Yemi Osinbajo, nothing substantial and concrete had been heard from them. Now that the council has decided to speak out, we urge the members not to relent but rise up and face the onerous task before them. The time and season are not one for docility, but for action and noting but action. The council must think out of the box, ways of solving the myriad economic and social challenges facing the country. So far, their activities have been below expectations.

The economic advisory council has the mandate to work with related cabinet members and heads of monetary and fiscal agencies to advise the President on economic policy matters such as fiscal forecasting, economic development, and a variety of internal and global economic issues.

Its recommendation that the gasoline subsidy be eliminated is a welcome development as experiences have shown that maintaining the current subsidy regime would exacerbate state government solvency. As the council rightly pointed out, there is the need for policy clarification on fuel subsidies, which would assist in resolving the dilemma created by increasing crude oil prices. Furthermore, there is the need for the Petroleum Industry Bill to be quickly passed into law to promote investment in Nigeria’s oil and gas sector.

In March 2021, petrol prices ranged between N162.17 and N200.87/litre –the highest being in Lagos State whilst the lowest prices were obtained in Adamawa State. Nigerians had at various times expressed concern that in addition to further worsening government revenue, re-introduction of subsidies will jeopardize investment in the oil sector and also create uncertainty about general government policy on pricing.

The Federal Government’s decision to assemble a team of accomplished economists led by Doyin Salami to advise President Buhari on economic policy was widely considered a positive move for an economy that had not grown in per capita terms since 2015. The expectations were that the motley crew of eight that made up this council would bring their experiences to appear in finding solutions to the numerous economic and fiscal challenges confronting the country. Surprising, that had not been the case, making people to wonder if the council actually exists.

Indeed, with the inauguration of PEAC, Nigerians were optimistic that Nigeria’s economic policy management was about to receive the professional touch which had been lacking since the present administration came into power. With the council’s docility, invariably, the initial optimism waned tremendously.

Aside Prof Salami, other members of the council are; Prof Chukwuma Soludo, Dr. Mohammed Sagagi named as the Vice-chairman, Prof Ode Ojowu; Dr Shehu Yahaya; Dr Iyabo Masha; Mr Bismark Rewane; and Dr Mohammed Adaya Salisu (Secretary).

Their mandate included advising the President on economic policy matters, including fiscal analysis, economic growth and a range of internal and global economic issues working with the relevant cabinet members and heads of monetary and fiscal agencies.

Since the appointment of the PEAC in 2019, hardly a month passed without report about the plan by the Federal government to take on more loans. Each request, like others, was justified by pointing to the revenue shortfall expected during the financial year. The latest request for N2.343 trillion was made on May 18, 2021 by President Buhari.

Bearing in mind that we are almost at the middle of the year, it is quite obvious that the request to the National Assembly already implies that the Federal government has left enhanced revenue generation or reduced recurrent expenditure out of consideration. Like the drug addict or the incorrigible drunkard who are too eager to borrow to appease their demons, Buhari is strongly wedded to the beg-borrow-and-spend approach to financial management. It is doubtful if the PEAC or anybody else can change him. He is likely to stop acquiring debts when there is nobody to lend. Independent reasoning ability may have nothing to do with it. The problem is, the PEAC members, being reasonable people are being called upon to advise a leader who is basically emotional and who is not guided by data.

Going forward, we urge the council to quickly analyse and develop information on economic developments and trends. Review federal government policies and programs to ensure they continue to promote sound economic policy, recommend economic policies that will benefit Nigerians and together with relevant government agencies help steer the country’s economic recovery and ensure that our nation builds back better and faster.