By Omodele Adigun
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.