Allow market to be, let naira reach N600, Agbakoba tells economy managers

In view of the struggling economy evidenced in the low economic indicators including low revenue, contracting GDP, high inflation rate, dollar shortages, Olisa Agbakoba, Senior Advocate of Nigeria (SAN) advised economic managers to free the system and let the market be.

He said the naira, which is currently exchanging with the dollar at N482 as of Friday, should be allowed to reach N600 or N1,000, and later it will become strong again.

The Central Bank of Nigeria (CBN) defends the naira through interventions in various segments of the foreign exchange market as external reserves deplete.

“There is no point to defend the naira, let it go and the real demand will be revealed. Let the FX flow, after it hits N1,000 it can come back,” he said.

Agbakoba has decried continuous neglect of the poor and vulnerable people, especially in budget allocation, and challenged the Federal Government (FG) to reduce the cost of governance.

Agbakoba who was recently appointed to head the federal government’s Committee for the Development of National Arbitration Policy made the call during the monthly forum of the Finance Correspondents Association of Nigeria (FICAN) held in Lagos on Friday.

Speaking on the topic: “Discussion with Agbakoba on 2021 budget and the economy,” the former president of the Nigerian Bar Association gave an instance of the current American budget with 50 percent allocation to benefits.

He wondered why there is no such allocation meant for the aged, vulnerable people in the country’s budget. The country according to him is structurally damaged and it can only be fixed by massive political and economic rejuvenation.

Talking about the recent #EndSARS protest that was hijacked by hoodlums, Agakoba noted that the excluded poor masses exhibited a bottled resentment. According to him, the poor has been harboring anger against the rich but they cannot hurt anybody because they know that the police are around.

“But on that fateful day when everything went down, they took advantage of it to vent their anger. It is not enough to say that you are giving food to school children. Such programme has to be institutionalized. If the government continues to spend 40 to 60 percent of its budget paying just one million Nigerians who are in public service, then there is in-balance,” he stated.

According to him, a lot of money the government raises goes into paying salaries. There are too much duplication and waste in the ministries. The government needs to implement the Arasanya report so that it can shrink the workforce and release money for appropriate sectors.

Preferring the solution, the legal expert said the answer lies in the devolution of power.

“The Constitution has two legislative lists namely, Exclusive and Concurrent. These lists have 98 items of power. The Federal Government exercises exclusive power over 68 items on the exclusive list.

”The states in concurrence with the Federal Government, exercise power over 30 items on the concurrent list. But the States may only exercise power on the concurrent list, only if the Federal Government has not already ‘covered the field’ on any of the 30 items.

”In effect, State Governments really have no power. I suggest that to resolve this, a committee may review the 98 items of power and assign what is best to Federal and what is best to the states, based on the principle of subsidiarity. I also suggest the Exclusive list and Concurrent list be renamed as the Federal Legislative List and State Legislative list. The Federal Government will exercise reserved powers. The States will exercise devolved power,” Agbakoba suggested.

According to him, the government does not need a huge budget. It is the economic resources that a state has that determines its capacity, not the money the government has, stressing that a state like Lagos for instance is losing a lot of money through its inability to deliver efficient land titling.

“One of the good ways to realize money is to look within yourself, to see if there are assets you can dispose of. If the government were to get out of a lot of things it shouldn’t be doing, it will be in a stronger position to focus on work in the economy. For me, the government should take into account, the unions and privatize all the airports. I am surprised that the government even wants to build new ones.

“The best-run airport in Nigeria is in the hand of a private person. He wants his money back, that is why it is efficient. The government’s best way of generating revenue is from taxes. The government is still borrowing money and putting it into Ajaokuta Still Mill instead of selling it. The number of businesses that government has across Nigeria can generate about twenty to thirty trillion,” he said.