[EMEFIELE SEEKS IMPLEMENTATION OF CABOTAGE ACT TO REDUCE REVENUE LOSS]
• Faults ‘Cause Analysis’ Of Economic Challenges
• Supports Communications, Property Tax
With estimated two trillion naira yearly revenue losses to foreign operators on the inland waterways transport, the economy is now ripe for the implementation of the Cabotage Act, says the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, at the 2016 Banker Dinner, in Lagos, on Saturday.
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
Emefiele said the Act has been grossly violated and at best, not fully implemented, as foreign interests have dominated both the operations and the accruing revenues, to the loss of the country.
“Out of about 600 ships that operate within our waters, only about 60 of them are owned by Nigerians and are mostly idle, in violation of the Act,” he said.
Speaking on the topic: “Policy Options for Reversing Nigeria’s Economic Downturn” at the event, he stressed that the industry is losing as much as two trillion naira yearly from the anomaly, beside the loss of job creation, capacity building, and significant backward integration.
According to the bank chief, the fact that oil prices will remain low for a longer period as projected, it is clear that foreign exchange inflow will follow that pattern too, with relatively lower reserves and revenue for the Federal Government.
He said the country needs to take a bold and decisive action that would fundamentally change the structure of the economy for good, mostly the will to implement policies.
“I think we can consider introducing a negligible telecommunications surcharge to be entirely borne by the initiator of a call. In order to protect the poor and vulnerable among us, we could structure it to only take effect after the third minute of talk.
“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.
“We could also consider introducing minimal property taxes across the country. This, not only raises money for the government, but also could be a veritable weapon against corruption, since it creates a database of who really owns homes in this country,” he added.
He faulted the “diagnosis” of the country’s current economic situation by many, which led to wrong conclusions against government policies and solutions proffered as a way out.
“In reality, Nigeria’s 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.