House Of Reps Should Be Scrapped - Ray Ekpu

Ray Ekpu Advocates Scrapping of House of Reps

Veteran journalist and member of the Committee on Politics and Governance, Mr. Ray Ekpu, has advocated the scrapping of the House of Representative leaving the Senate as the only national law-making chamber.

He frowns at the present arrangement where there is Senate and House of Representatives; describing it as wasteful and overburdening.

The founder of the defunct Newswatch magazine alleges that the two chamber parliament is a breeding ground for discord and disagreement as there are endless supremacy battle between the Senate and House of Representative. He calls for increase in the number of Senators from each state of the federation to four per state and one for the FCT.

His words, “I will like to vote for unicameral legislature because at present, we are already overburdened. We have 774 parliaments in the local government. We have 36 States Houses of Assembly. And we have two at the national level.

I am advocating for the scrapping of the House of Representatives. I will vote for having the Senate. We can increase the number of Senators to four per state. In that case, we will have 144 Senators plus one representing the FCT. We will reduce the cost. We will reduce the friction that currently occurs between the House of Reps and the Senate.”

Continuing, Mr. Ekpu makes comparison between the Nigerian national assembly and that of the United Kingdom where supremacy battle between the two law-making chambers in that country is non-existence. He decries a situation whereby the House of Representative is always itching to be at par with the Senate in terms of functions and power.

“The House of Reps is called the lower house; they said they are not lower house. We are equals. But the constituencies are not equal. The salaries that they earn are not equal. Nobody in the House of Commons will say Members of Lords, we are equal. They do different things. The Senate does confirmation hearing, but the House of Representative don’t but they say we are equal.”

“I am advocating for a one chamber parliament. And that is the Senate,” he concludes.

On the issue of state police, Mr. Ekpu states that he votes for state police “hundred percent.”

He went on to advance reasons for aligning himself with the clamour for state police.

“My position (on state police) is not an armchair presentation. I am speaking because I was a member of the Police Service Commission for five years. And I have knowledge about how the federal police work.

“If you have true federal system, you will have state police, state courts etc. These all go with true federalism. We are complaining already with the problem we have in security. And look at the blame game going on between the federal government and the Borno State government.“

He enumerates the benefits inherent in state police, “if you have a police service that is close to the people; that nearness provides protection. It provides cover for the rural populace. Local police will know the territory.

If I post a policeman from Abuja comes to my village; he doesn’t know the arrangement, he doesn’t know the terrain. If you don’t have a local police, you will be denied of local knowledge of happenings – customs and people and so on.”



NATIONAL CONFERENCE

Committee on Public Finance and Revenue

Progress Report 05-05-2014

Verbatim

The committee on Public Finance and Revenue invited principal officers of public institutions that relate to the deliberations of the committee with the aim of getting relevant information that will aid them in making appropriate recommendations that will meet the various challenges that Nigeria is facing in terms of generating revenue for the development of the country. The committee started its deliberations today with the deputy chairman, Senator Azu AGBOTI who brought to the notice of the committee members that the chairman of the committee Adamu M. HE. ALIERO will be coming later as he had to attend to some other issue. But that the interview with the principal officers had to go on, since they were already around. The committee members said the official conference prayer and immediately got to work.

The committee invited the Director General of the Debt Management Office (DMO) to come and discuss with the committee the issues of public finance and revenue as it relates to debt management. The team of three from the Debt Management Office was led by the Director General Dr. Abraham Nwankwo who did the presentation.

PRESENTATION
Dr. Abraham Nwankwo started by thanking the committee members for giving them the opportunity to share their experience of what is going on in the public finance and revenue of the country as it relates to debt management. He used the opportunity to thank the committee members on the historic role they have decided to take in the forming of a new Nigeria. He went ahead to note that the discussion of technical issues is very important, but before the conference will be over, it is expected of the delegates from various part of the country would have united despite their diversities. He said the delegates were the nucleus of the new Nigeria that the whole country is envisaging and that responsibility has been committed to them.

Having said all that, the DG went ahead to do a presentation on how public finance deal with the issue of mobilization by the state (sovereign). He said in every country, the government, has to see how it can mobilize resources to finance various projects. What government does is just a mirror of what household and businesses do. The area of his presentation centred on the following thematic issues; debt management, the status of public debt in Nigeria and what can be done to improve the revenue of the nation.

On the issue of debt management, he started by citing the ideal family as an example. He said that for a man that has four children and wants to send them to school, but the money he has at hand can only pay the school fees of two. If the man knows that his salary can pay for the four, but the money he has at hand can only pay for the two, he will go and borrow to send the four to school, and later pay back with his salary based on the agreed interest. The same happens in government, when it looks at the cash flow in terms of revenue, it has and it will not be enough for its capital and recurrent expenditures. Then government goes ahead to borrow because it knows that the revenue that will be made will be used to offset its debt. He added that many have argued that instead of borrowing why not save. He said the kind of money needed to finance capital project that will see fast development will take longer years to save before projects can be executed and that in thus slows down development.

In summary, he emphasised government borrows because their planned expenditure is greater than their present revenue. Government does these things because they want to fast track development i.e. build more roads, rails; solve the issue of unemployment and other infrastructures etc.

He stressed that another reason why government borrows; despite the fact it might have enough revenue is for the purpose of influencing the economy in terms of restructuring and redirection.

Government revenue and public borrowing were another thematic issue that was discussed in the presentation. He noted that after all these, then question many wants to ask is that if the government wants to borrow, what should be the limit, and when will it decide to stop?

He cited that in business, even a company decides to borrow beyond a certain level, it can crumble due to competition and economics of scale. So there must be a limit to borrowing. Financial analysts know that there is a term called optimum leveraging ratio. Borrowing is important most times to double ones overall capital he added. He went ahead to say for government also, there is a limit it can borrow.

He stressed that the challenge is not borrowing, but when government borrows and doesn’t use it to develop the state that is where it fails. Generally, there is a link between public finance and a country debt management. What that means is there is more about economics in borrowing than we know. He said even developed countries like Germany and other western countries still borrow.

He looked at Nigeria as a case study, he said that Debt Management Office (DMO) was established in the year 2000 and one of its responsibilities was to address the Paris Club debt the nation owed and other debts. After the debt was relieved from the country, many questioned what their responsibility was. He said DMO is not just for the country debt management, but is also responsible for the economic restructuring and direction of the country. And mobilise additional resources to fast track development. He said DMO appreciates the fact that federalism is the structure of government Nigeria operates and the states have a level of autonomy where they can borrow money to develop their state. According to him, DMO went ahead to help every state to develop their debt management institution from 2007 to 2012.

He declared the status of Nigeria’s debt. He pointed out the external debt for federal and states as of March 2014, is about $9.1 billion dollars, while the domestic debt is about $56 billion dollars as at March 2014. He said the country’s debt is sustainable in terms of sovereignty and liquidity.

He said, however, the government knows that Nigeria depends mostly on Oil and Gas, they are very careful not to exceed their limit in borrowing.

Talking about the rebased GDP, Dr. Abraham Nwankwo added that the rebasing of the GDP that was done by the National Bureau of Statistics which saw Nigeria to be the largest economy in the Africa also helped in dropping the country’s debt from 22.4% to 12.42%. He stressed that the nation’s economy is growing, but the revenue from tax remains stagnant. One of the major reasons for the growth of the economy was the improvement in the Agricultural sector, but he noted that they have not been brought into the taxation network to generate revenue for the government.

RECOMMENDATIONS
Reacting to the enquiries sent by the committee to DMO, on wanting to know what can be done to improve the public revenue, he recommended the following:

1. There is need to bring more of the informal sector in public revenue through taxation. He cited the Agricultural sectors and other relevant sectors as an example.

2. Various sanctions for non-compliance to tax should be effected without delay. And should be carried along with proper education of Nigerians on why they should pay their taxes.

In conclusion, Dr. Abraham Nwankwo emphasised that government will continue to borrow to be able to supplement the revenue it has to fast track development.

REACTIONS
Some of the questions that were captured include:

Alhaji Abdullahi OHIOMAH expressed his worries about the country domestic debt. He added that he doesn’t have the component of the debt, but he knows that local contractors have suffocated over the year. He asked what was responsible for that.

Esther ANDREW said she would like to know if there is a regulation that limits the level states can borrow, because many of them borrow and are unable to pay back.

Com. Barr. Mohammed Ozigi MUSA-LAWAL referred to the presentation where the DG pointed out that taxation is a source of revenue and also, oil and gas is the country highest source of revenue. He noted that the wants to know why the other sectors, do not make the economy robust as other revenue.

Mr. Moses NGBALE was concerned about the application of the DMO fiscal Act reiterating that many states have not been observing the Act. He also said that he wanted to know the relationship between the DMO and the banks.

RESPONSE
The DG gave a general response to all the questions, stressing that it was in the documents that was circulated to the committee. He said that the county’s domestic debts do not include local contractor’s debt. He stressed that when a ministry awards a contract, it has already been provided for in the budget. It is not the responsibility of DMO to see two such issues, but it is the responsibility of the budget office of the Federation (BOF). He added that for DMO to have effective control over the state, they included all debt to make it comprehensive. But if they follow the global best international practice, state debt will be very small.

While answering the question of Esther ANDREW, he said that there are laws and guidelines for borrowing in Nigeria. He said that the law is very sensitive that no external borrowing can be done without the knowledge of the National Assembly. So, most external borrowings are made by federal government and then give to the states. In senses, it is only the federal government that borrows externally. When it comes to domestic debt, he stated that there are laws like the DMO act, as amended 2007 and other laws for regulation. He also stated most of the information about the country’s debt status can be found on their website: www.dmo.gov.ng

The committee was delighted as Dr. Abraham Nwankwo answered most of the questions. The chairman Adamu M.HE. ALIERO commented on the presentation and he concluded the interview by calling the next institution for its presentation.

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