Man, Others Fault Federal Government, States for Sharing N300 Billion

The Manufacturers Association of Nigeria (MAN) and other stakeholders have dismissed the sharing of $2billion (or N300billion) between the Federal Government and the states, describing it as unhelpful and unnecessary.

Instead, they proffered the federal and state governments should reflate the economy by paying the N3.8 trillion debts owed local contractors. Going by our history, the manufacturers are afraid that the money being shared by the tiers of government would end up being stolen by officials.

National Economic Council (NEC) on Tuesday approved the injection of N300 billion into the nation's declining economy drawn from the Excess Crude Account. The NEC meeting, presided over by Vice President Goodluck Jonathan also directed the Federation Accounts and Allocation Committee (FAAC) to work out the sharing formula.

National Planning Minister, Dr Shamsudeen Usman, who briefed newsmen on the issue, said the money would be shared next week among the federal, state and local governments.

But reacting on the issue yesterday, MAN President, Alhaji Bashir Borodo, said though, he was in support of injecting the money into the nation's economy as a micro approach to the problems in the economy, he suggested that the money should be made available to commercial banks as a reprieve.

Borodo, however, confirmed that the lifeline was part of the N400 billion, the Governor of Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi said would be injected into the troubled banking industry.

He urged the Federal Government to equally approve the N500 billion intervention fund to the industrial sector, which was submitted to the Presidency by the Minister of Commerce and Industry, Chief Achike Udenwa, saying such amount would improve the nation's industrial growth.

Also, the Director General, Association of Nigerian Exporters (ANE), Mr. Joseph Idiong, warned that the excess crude oil money should not be shared among the three tiers of government; rather it should be invested in long term projects that would benefit the nation in the long run. He said the oil sector would soon lose its relevance due to the ongoing renewal energy reforms, advising the Federal Government to invest the money in infrastructural development like power, roads, railway, among others, instead of sharing it.

He also urged the Federal Government to place five per cent levy on each barrel of crude oil and invest the money in non-oil sector to strengthen the economy, even as he commended the government for sanitising the banking sector.

Idiong further advised the government to refocus the economy through long-term economic projects.

"Let me also advise government not to close any industry in the country as a result of the loans owed to some banks. This will not be a healthy development for the nation's economy. It happened during the time of General Sani Abacha, when they closed down some industries to pay the loans", he said.

Other financial experts argued that payment of debts to local contractors would boost the economy instead of the N300bn stimulus package that would be cornered by politicians and bureaucrats.

They also urged government to buy-up the toxic assets of the eight troubled commercial banks in the country to end credit crunch in the economy instead of the controversial stimulus.

A senior lecturer in the Department of Economics, University of Lagos, Dr. Festus Iziuehe said if Federal Government largesse was meant for the economy, it was a misplaced priority. He said the money would not stimulate the economy.

He wondered how government intends to stimulate economic activities in the country by releasing money to politicians, saying such money would at best be used to finance social projects and political activities.

He said since the private sector drives the economy, for any form of stimulus fund to achieve its purpose, it must be targeted at funding the operations of the private sector.

Iziuehe urged government to direct its stimulus package to the real and productive sectors of the economy, saying it should also pay local contractors for the jobs completed several years ago and for which they are yet to be paid. He said most of the contractors are the people owing the banks.

Also, a top official of a new generation bank in Lagos who was given a clean bill of health by the Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporation (NDIC) joint audit committee, said government can only stimulate the economy by buying up the toxic assets of banks and encourage them to start granting credits again.

He said that every modern economy is run on credit, saying giving or taking loans is not a crime.

The bank chief who would not want his name in print, stressed that without credit to the productive sector, the Nigerian economy may face recession.