Dr Eugene Nweke
The Sea Empowerment Research Centre, a professional body has taken a swipe at the Central Bank of Nigeria (CBN) over the recent hike in Customs Import Duty Exchange Rate to N1, 365 per dollar, insisting that the policy is not only insensitive to the plight of Nigerians but also falls short of the so-called renewed hope mantra of the Bola Ahmed- Tinubu administration.
According to a statement by the head, research department, Dr Eugene Nweke, the body also said that both the CBN and the coordinating ministry, the Federal Ministry of Finance ought to have weighed the negative implications fiscal and monetary policies could have on the citizenry before introducing them, especially given the already spiralling inflationary trend, which has reduced their purchasing power.
According to the Centre, one of the core objectives of the renewed hope mantra should be moving away from the old order, where policies were introduced without considering their possible implications on the wellbeing of the citizens to a more requisite new order, where the interest of the citizenry guides policy making decisions.
The Centre further argued that the CBN and the ministry through statutory feedback mechanisms ought to know that many businesses in the country are shutting down on weekly and monthly bases while several others are downsizing with the attendant population of Nigerians out of jobs rising in the face of dwindling purchasing power and high inflation rate, among several other economic woes; which contribute significantly to worsening hardship, poverty and their contributory effects on the insecurity in the land.
It further argued that given the problem associated with declining global trade, nations and governments that are sensitive to the welfare and wellbeing of their citizenry are introducing duty and tax rebates and other incentives to keep businesses afloat. This is in addition to other trade facilitation windows that could help boost global trade volumes.
The Centre therefore urged the CBN and the ministry to undertake a deliberate review of the economic concerns associated with some of their fiscal and monetary policies, arguing that shying away from that would amount to a mere display of poor administrative sensitivity to the impulse to the wellbeing of the citizenry and commercial environment of the nation.
The statement reads in part: “We wish to note that, at the recently concluded World Economic Forum WEF, one of the global concerns raised at the forum revolved around the drop in the global trade volumes as witnessed in 2022/2023 period, which the Director General of the World Trade Organisation WTO, Dr Ngozi Okonjo-Iweala gave performance statistics and proffered options available to the global bodies to overcome the challenges in this direction and thus boost global trade volumes in the face of the myriads of global challenges impeding on trade volumes amongst nations.
“She urged trading countries to stimulate increase in trade volumes via trade policy rebates and waivers, eradicate delays associated with dwell time, increase trade facilitation windows, removal of trade barriers, promote bilateral trade agreements, etc. It was never heard of a systemic and incessant duty exchange rate increments as an alternative window or bar up.
“Wherefore, in the Centre’s candid opinion, the Coordinating Ministry, should first and foremost, carry out or conduct an impact analysis (on the increment from ₦400 plus exchange rate for duty onwards to ₦700plus) on the trading public and their related activities across the international markets; the manufacturing sector, and the consuming public.
In the Centre’s opinion, dishing out fiscal and monetary policies without recourse to their economic implications in every sense of responsive leadership via a crystal and statutory feedback mechanism, falls short of the renewed hope mantra.
“The Centre believes that one of the core objectives of the renewed hope mantra, should stem from rising from the old order to more requisite new order, especially in application. As such, the Centre equally believes that, the ministry has a duty to know how many businesses are closing shops per month; how many are downsizing weekly, monthly and quarterly; what is the population of out of job Nigerians; how stable is the labour market under the prevailing circumstances; how has the inflation rate affected the purchasing power of the citizenry; the contributory effect of these policies and increments on the ailing economy and the hardship and poverty in the land; its contributory effect on the insecurity in the land etc.”
It further argued that any hike in the import duty exchange rate should be a function of the forces of demand and supply, adding that there is need for the fiscal policy makers to do a total system re-evaluation. It urged the apex bank to desist from the seeming incessant revenue escalating methodology, which it observed had become a monthly ritual to aide higher revenue, a development that might in the long run prove counterproductive.
“It must be stated that monetary policy reforms must be done with a scalpel and not an axe, and by people who understand that the problem of currency devaluation or the poor performance of the foreign exchange transactions is not truly caused by international trading or trades alone.
It has been argued that the cozy relationship and activities of some Currency Dealers (Bureau De Change) seem to be taking the shape of another form of concentration, even though, inevitable in a country of our size.
Also, while it is worthy to note that, the activities of money laundering and imports racketeers, by extension drug and arms trafficking (smugglers) have received prompt operational curtailment in the country, notwithstanding, it must be stated that, that their activities have gone more nuclear or sophisticated as its now embellished with terroristic organisations.
Fiscal policy makers have a duty to understudy and discourage the activities of insider trading within the banks at all levels, with special focus on the growing pace of hacking via internet banking. Fiscal policies must be deliberate at encouraging our most enterprising citizens to engage in other, more nationally beneficial money-making ventures. For instance, international traders must be encouraged, and not driving them and their capital and associated job creations out of the country, via over taxation.
Fiscal policies must have the capacity to monitor and checkmate the activities of an investor which turns a monopolist with cozy relationships with insider trading, thus oligarchy thrives unabated, as they have mastered the ability to borrow huge sums of money for acquisitions, then manipulate accounting principles, play legal takeover games or avoid payments of accurate taxes, in reality such investors do not really contribute to the nation’s wealth.
As a responsive government, it is expected that, fiscal policies must be structured in a such a manner that, it places emphasis on revamping its fiscal implementation regime so that, it must seek to protect the larger number from acts of bullying and abuses associated with cozy relationships, resulting to failure and compromises to regulatory standards”, the statement also said.
