What The Presidential Relief Will Do, By Experts

•President Buhari

There were reactions yesterday to the approval of a comprehensive relief package by President Muhammadu Buhari to bailout some financially distressed states.

They said the intervention will bring relief to embattled governors and calm the workers, who have been warming up for showdown with the states’ helmsmen.

Bailout will reflate economy

The former Executive Director, Keystone Bank Limited, Richard Obire said the system will be reflated after the cash hits the accounts of the affected states.

On the implications of the bailout, Obire predicted that demand for goods and services will rise, thereby helping the economy back on its feet when the workers get paid the arrears of their salaries.

He, however, advised the Federal Government to spell out the repayment terms for the soft loans, describing President Buhari’s decision to bailout the states as good news for the economy.

Obire called on different state governments to boost their Internally Generated Revenues (IGR) to forestall sliding back into further debts.

On what the affected states can do, the banker said the governments can also re-negotiate worker’s salaries with unions based on the elasticity of the IGR, even as he pushed for more investment in capital projects.

Besides, Obire advised states to find ways of attracting foreign direct investment (FDI) and boosting local production of goods and services.

Intervention timely

Managing Consultant, Nesbet Consulting, a Lagos-based finance and management, a consultancy firm, Mr. Alaba Olusemore, described the $2.1 billion bailout to fiscally distressed states “as a right step in the right direction.”

According to him, the intervention was timely as the Federal Government can ill-afford an industrial crisis by workers in the affected states at the beginning of a new administration.

Olusemore believes the bailout will have multiplier effects on the economy of the benefitting states.

He said: “It will reactivate economic activities in those states. However, there must be conditionality attached to the bailout fund and the states that are the beficiaries must involve labour unions and other stakeholders to ensure judicious use of the funds.”

Olusemore urged the states to plug all leakages in the system and avoid over-invoicing by contractors handling ongoing projects.

“The state governments must carry out staff audit, not just the usual head count, but to ensure that jobs are clearly defined to avoid duplication of responsibilities,” he said.

He also canvassed a temporary embargo on employment until the fiscal situation in those distressed states witnessed improvement.

“There is urgent need for aggressive diversification of the states’ revenue base through the exploitation of abundant mineral resources in their domains”, he urged.

It’s time to boost SWF

Also reacting, a teacher at the Pan Atlantic University, Dr. Austin Nweze said more attention should be given to boosting the Sovereign Wealth Fund (SWF) by encouraging states to put more money into the Fund.

He said such step will enable states to rely on such funds at difficult times.

He also agreed with Obire on the need to build more industries to widen the IGR base.

Nweze urged states to reduce bureaucracies and tackle institutional corruption.

The Nation