As Nigeria’s
economic recession bites harder and unemployment rate soaring, Governor of the
Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, has advised
the Federal
Government to cut its losses by fully implementing the 2003 Cabotage Act to
turn in about N2trillion annually.
Emefiele, who
gave the advice in his paper entitled “Policy Options for Reversing Nigeria’s
Economic Downturn,” delivered at the annual Bankers’ Dinner at the week end in
Lagos, lamented that the economy is currently facing a classical case of
stagflation. “This situation largely occurs when a country’s Gross Domestic
Product (GDP) is falling or stagnant, while unemployment and inflation are
rising, all simultaneously.Under these circumstances, what then can
policymakers do and to whom should they turn? ,” he queried.
He then came
up with a number of options to reverse the nation’s dwindling fortunes, one of
which is the fully implementation of the Cabotage Act.
His words:
“There are several ways we can raise additional revenue to finance the
increased expenditure that is needed to engender fast and sustainable growth in
the economy. Another option to consider would be to fully implement the 2003
Cabotage Act. The Act stipulates that all cargoes and passengers in the inland
and coastal waters be transported by ships and ferries built, owned, crewed and
manned by Nigerians. Contrary to the requirement of this Act, there are several
foreign-owned vessels providing shipping services locally. Out of about 600
ships that operate within our waters, only about 60 are owned by Nigerians and
they are mostly idle, in violation of the Act. Industry sources suggest Nigeria
may be losing as much as N2 trillion annually from this anomaly. In addition to
raising revenue, a full implementation of the Act could also spur job creation,
capacity building, and significant backward integration.”
He also
proposed talk tax on mobile phone for middle and upper class, which he said
could rake in about N100billion annually. “I think we can consider introducing
a negligible telecom surcharge to be entirely borne by the initiator of a call.
In order to
protect the
poor and vulnerable amongst us, we could structure it to only take effect after
the third minute of talk. Some analyses have indicated that the government
could earn about N100 billion per annum from this alone. Obviously, this
surcharge will mainly be borne by middle and upper class people since I do not
know many poor people who make calls for more than 3 minutes!”
Apart from
this, the apex bank chief also suggested introduction of minimal property taxes to raise money for the
government and also serves as a weapon
against corruption since it would create a database of who really owns homes in
this country.
Other sources
of generating revenues, canvassed by the CBN boss include infrastructural and ICT investment.
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