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HomeBusinessAn economist raises concerns over corruption risk in Presidential Palliative implementation.

An economist raises concerns over corruption risk in Presidential Palliative implementation.

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Economist Marcel Okeke has sounded a cautionary note about the potential for corruption to undermine President Bola Ahmed Tinubu’s recently unveiled palliative measures if proper monitoring and implementation mechanisms are not put in place.

He expressed concerns that the allocation of resources from the central government to state and local governments could be susceptible to “political patronage,” leading to the distribution of benefits along party lines.

Okeke shared his insights during the well-attended monthly forum of the Finance Correspondents Association of Nigeria (FICAN) held in Lagos on Thursday. He also lauded the Federal Government’s initiative to establish the Taiwo Oyedele-led Committee on Fiscal Policy and Tax Reforms, predicting that the committee’s efforts would yield fresh revenue-generation ideas for the country.

Okeke further expressed optimism that the committee’s work would focus on streamlining taxes to provide relief to both corporations and individuals.

The discussion took place against the backdrop of the President’s recent announcement of palliatives aimed at alleviating the impact of policy reforms on vulnerable households and businesses.

Out of the N500 billion palliative package (equivalent to 0.25 percent of GDP), N75 billion is earmarked for manufacturing support, N125 billion for Micro, Small, and Medium-Scale Enterprises (MSME) financing, N100 billion for Compressed Natural Gas (CNG) buses, and N200 billion for agricultural intervention.

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Okeke, while assessing the palliative measures, suggested that they appear to be reminiscent of strategies implemented by the previous administration. He argued that the Nigerian economy requires a comprehensive stimulus package rather than mere palliatives, which he characterized as unproductive and unearned “transfer payments” that do not contribute to genuine economic advancement.

He emphasized the need to diversify the economy by promoting sectors like agriculture and manufacturing, thereby reducing the nation’s reliance on oil revenues. During his presentation, Okeke also addressed additional factors affecting Nigeria’s economic landscape, including the recent coup in the Niger Republic, palliative executions, security concerns, and oil theft.

On the issue of currency depreciation, Okeke highlighted the adverse impact of the Naira devaluation on businesses, particularly multinational corporations with global operations. He called for the government’s prompt intervention to prevent further company collapses, drawing attention to the case of GlaxoSmithKline (GSK) as an example.

Okeke noted that GSK’s inability to repatriate revenues and dividends was attributable to foreign exchange shortages, underscoring the potential implications for the Nigerian economy if more companies were to encounter similar challenges.

He expressed hope that GSK’s departure would not set a precedent for other corporations to follow suit.

Regarding security concerns, Okeke acknowledged the government’s ongoing efforts while emphasizing the need for more comprehensive measures.

He stressed that addressing security threats is crucial for creating an environment conducive to foreign investment and economic growth. Additionally, he mentioned that the outcome of the presidential election tribunal’s judgment would play a significant role in shaping the economic landscape moving forward.

(Edited by Oludare Mayowa; omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)

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