How 2016 Budget Can Solve The Foreign Exchange Debacle

It will take the resolve and will power of the fiscal authorities to help the monetary authorities solve the foreign exchange problem that has eaten too deep into the nation’s foreign reserves.
Of course, it may bring about another session of ‘wailing’ from the international circles, but it is just a matter of, you cannot give what you do not have.
A look at how much has been proposed to be spent on vehicles alone in the 2016 budget indicates how much of our foreign exchange will be sacrificed at this time of fast dwindling foreign exchange earnings. That is how it has always been, but, under the present circumstance, must it continue to remain so? 
If the final budget that will be passed will still contain these figures, the resolve of government will not only save the country from frittering away of hard foreign exchange, but will even create jobs.
The way forward is buy made or assembled in Nigeria vehicles this year, and see how much foreign exchange the country would have conserved for other other critical areas that are begging for it.
Reports have it that, Nigerians have spent a whopping $31.67 billion (about N6.3 trillion) in the importation of brand new and fairly used vehicles (popularly known as tokunbo) and other allied automobile equipment between 2009 and 2013.
The development, which industry watchers have described as unhealthy for the economy was made known recently by the National Automotive Council (NAC) at a presentation in Abuja.
According to the report, the amount was spent on importation of vehicles, tractors, trailers and semi-trailers, civil engineering and contractors’ plant and equipment.
A breakdown of the figure shows that the country spent $5.407 billion in 2008; $4.012 billion in 2009; $5.592 billion in 2010; $4.082 billion in 2011; $6.364 billion in 2012 and $6.212 billion in 2013 on the importation of these items.
A further breakdown shows that about 100,000 new and 300,000 used vehicles were imported into the country in 2012, excluding tractors, trailers and semi-trailers, civil engineering and contractors’ plant and equipment. Industry operators believed the worrisome development might have influenced the administration of former President Goodluck Jonathan to introduce the National Automotive Policy (NAP) to encourage local production of vehicles.
The policy which was widely criticised by stakeholders, notably, the Association of Nigerian Licensed Customs Agents (ANLCA), imposed 35 per cent duty and 35 per cent levy on imported new and used vehicles aimed at discouraging importation.
The association, led by its National President, Prince Olayiwola Shittu, had posited that the policy would, among other things, impede their jobs as well as lead to huge job losses by clearing agents and shipping companies alike.
Emerging facts from the 2016 Budget is as disturbing in the face of challenges the country face in its foreign exchange market where the naira is reported to have fallen to over a 40 years low. 
Analysts are particularly vexed that government plans to votes N3.6 billion for BMW cars in Budget 2016.
Anozie Clifford, a business man in Lagos said, if that amount is changed towards Innoson Group of Comapnies, vehicle manufacturers in Nigeria or other manufacturers that have invested so much money to have assembly plants in Nigeria, that will boost their capacity to employ more Nigerians.
Anozie said, on the other hand, if we spend the money importing from BMW that has investment in Nigeria, we will be ensuring increased employment in other countries to the detriment of Nigerian youths.
Bimbo Aduke, a banker said, if e government went ahead to importing these cars as stated in the budget, it then means, they want us to end up as Greece. According t her, this is the time for us, as a nation to think locally, and save as much foreign exchange we can save for imports that are very key.
Aduke said at about $28 billion, the nation’s foreign reserves can only guarantee just a few months of import, and that amount must not be spent on frivolous importation since earnings from crude oil has continues to dwindle.
For Justus Okon, this is an opportunity for the new government to create job opportunity. According to him, if the current government decides to buy vehicles from Ford, Nissan or Innoson that at least assemble vehicles in Nigeria, other big car manufacturers will consider opening shop in Nigeria and that will help create job opportunities.
According to reports, the BMW salon cars for principal officers are likley to cost N3,630,000,000, going by the 2016 budget. The number of the cars is not specified.
That is besides, N189.1 million is voted for tyres for various vehicles, including the bulletproof and plain Mercedes Benz cars.
The expenditure on tyres is to cover other brands of vehicles, including Toyota cars, trucks, Land Cruiser Sport Utility Vehicles (SUVs), Prado SUVs, Hilux pick-up vans, Peugeot 607 and 406 cars, ambulances and others broadly described as “ utility and operational vehicles”.

PMB frowns, rejects N400m for presidency cars

But the good news is that,President Muhammadu Buhari has frowned at plans by the National Assembly to buy over 400 new vehicles valued at over N4.7 Billion at a time the nation is facing cash crunch.
Buhari criticised the plan during his first televised Presidential Media chat, saying he had rejected a plan to buy new vehicles for him in the 2016 budget estimates.
“I turned down a N400 million bill for cars for the presidency, because the vehicles I am using are good enough for the next 10 years,” he said.
The president said he was having problems with the National Assembly because they were refusing to subject themselves to the new policy of a Treasury Single Account, TSA, and were planning plan to buy new vehicles.
“If I can turn down N400 million for the presidency that I do not need any new car because of the economy, I can’t see the National Assembly spending more that N47 billion to buy cars, on top of transport allowance they collect.
“I have to revisit that story. The budget for their transport allowance comes up to a N100 billion. With the kind of money that goes into the National Assembly, we have to look at it conscientiously and see how we can live within our means,” he said.
The president said he would call for a meeting with the leadership of the National Assembly on the matter.
Resolving to think Nigeria between the two powerful arms of government will be the beginning of good things.

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