By Sadiq kwaltom CNA, CNIM, CIHCD (Msc in view)
The decision of the Executive governor of Plateau state, Rt Hon. Simon Bako Lalong mandating the state economic advisory council to come up with a road map to salvage the economy of the state owing to the ravaging impact of corona virus pandemic on the global economy as well as its effect on Nigerian economy is apt but not timely, it is a project which can not be effectively achieved.
The economy of any Nation is monitored, supervised and controlled by the federal government through the central bank. The central bank on the other hand controls and stabilizes the economy through the use of efficient, effective, reliable fiscal and monetary policies because the various states in Nigeria rely heavily on the subvention from the federal government which is derived through the sales of crude oil.
For a state to shut down its economic activities due to the outbreak of Covid-19 within one month and start advocating for post virus outbreak economic blue print is worrisome, that goes to show that the state hasn’t been doing well in recent time. If the state economic advisory council has been up and doing, the state should have reserved and alternative source of income to sustain governance for about six months during this period.
From the foregoing, the cases from the deathly virus keep increasing daily within the country, that is to say, defeating the virus in no distance time seems unlikely thus, the high probability for weak economy is likely.
If that happens to be the case, the state economic advisory council cannot at this point in time, brainstorm to come up with a viable economic policy as it will be term as exercise in futility. This is because the actual dept, impact or injury in which the virus will cause the economy cannot be ascertained. And since it can’t be ascertained at this point, then the question to come is what then will they be working on?
The major sources of revenue to plateau state government is from the allocation from federation account, internally generated revenue which include taxes, grants from businesses, individuals, and sometimes loan from external bodies.
At a time when business activities are down, revenue ceases to enter the government account through payment of taxes, individual business too collapse and when businesses collapse, there won’t be revenue for the government even after the covid 19 pandemic.
When such scenario plays out, the government should suspend payment of taxes, bills, rates among individual and business. They should also give out loans if possible to support small and medium scale enterprise if the need arises so as to maintain the tempo of production of goods and services thereby sustaining the economy.
The government of the day from its earlier decision to suspend all capital project due to shortage of funds but will sustain its recurrent expenditure is quite commendable because money must be in circulation but the decision to come up with post covid 19 economic policy is an exercise in futility, it will only lead to wastage of funds with no appropriate or tangible result.
My advice to the Governor through the state advisory council is to employ and encourage the use of technology in business as done in many advanced countries, this will keep the revenue from taxes coming in, it will also ease the stress of transaction, encouraging social distancing and will lead to high productivity.
The state economic advisory council should at this point monitor, support and encourage the government on the necessary monitory policy to adopt so as to sustain the state economy without waiting for the negative moment to come. The government on the other hand must cut down unnecessary cost of governance while been transparent to the citizens. This transparency will make the people to continue to be loyal while they pay their taxes. By so doing, the state will bounce back stronger than ever after the deathly virus. For a post economic blue print to be achieved, all the variables must be fully known so as to be aggregated accordingly.