Nigeria Plans Laws to End Economic Slump, Senate Head Saysby and
Senate leader working on legislation to attract investors
Country needs freely floating naira to win investor confidence
Nigerian lawmakers are poised to pass laws to help end the country’s worst economic slump in decades by attracting private investment in roads, rail and ports, Senate President Bukola Saraki said.
“We have 11 bills that we have identified as bills that we need to pass to get the economy up and running,” Saraki, 53, said in an interview at his residence in the capital, Abuja, on Thursday. “We are looking at how the private sector can take major trunk roads away from government, how the railway too can be taken away from government.”
The monetary and fiscal authorities also need to work together to achieve macro-economic stability and enable a free-floating foreign-exchange regime, so that the local currency, which is “undervalued,” finds its real value and wins investor confidence, he said. Saraki is Nigeria’s third-ranking official after the president and the vice president.
Africa’s most populous country of about 180 million people is facing its biggest economic crisis in 25 years with the collapse in prices for oil, which provide 70 percent of government revenue and more than 90 percent of all foreign income. Dollar shortages have hurt the import-dependent nation, affecting importers of raw materials and finished goods alike.
With militant attacks in the southern oil-producing region further crimping export revenue, President Muhammadu Buhari’s government is struggling to implement a record budget of 6.1 trillion naira ($19.2 billion) planned to stimulate output by investing in infrastructure projects. The International Monetary Fund estimates the economy will probably shrink 1.7 percent this year.
Nigeria would need $3.1 trillion over the next three decades to cover existing infrastructure deficits, with half of the funding expected from private investors, according to its Budget and Planning Ministry.
“It’s clear that government can’t fund them even if the crude price hadn’t dropped this much,” Saraki said. “If we can address the infrastructure shortfall, that way, we’ll bring real productivity to the country.”
Apart from laws to enable private investors to run rail, roads and ports, the legislature is also working on bills to improve the ease of doing business in the country as well as reform the customs service and the petroleum industry, he said.
“The most important thing is for us to continue to bring confidence back into the economy on the short-term,” Saraki said. Resolving the insurgency in the Niger delta through dialog and creating a “truly flexible” exchange policy will help boost confidence in the economy, he said.
Despite persisting economic woes, the All Progressives Congress government, which took power last year, has successfully curtailed the Boko Haram Islamist insurgency in the northeast, he said. Buhari’s administration has also shown the political will to fight corruption with positive results, according to Saraki, though advising that the efforts should be according to the dictates of the law.
Saraki is currently facing charges of false declaration of assets before a tribunal, while a separate forgery case against him was dropped last week. He described the cases as “persecution” by unnamed political adversaries and grouped them among missteps by security agencies and prosecutors that might undermine the fight against graft.
“The sense of purpose is there,” he said. “But if we continue to make these kinds of errors, then people will lose confidence and that’s what we can’t allow.”