Nigeria Economy On The Verge Of Recession…..Finance Minister

The Minister of Finance , Budget and National Planning, Mrs Zainab Ahmed, said the fall in crude oil price in the international market has worsened the economic situation of the country.

Ahmed, on Thursday, said the coronavirus pandemic and falling oil prices are set to force the nation’s economy into negative growth.

Ahmed made this known after the National Economic Summit meeting in Abuja on Thursday, even as she added that the economic contraction will multiply the misery of the poor.

According to her, “On the economy, COVID-19 has resulted in the collapse in oil prices,” she said. “This will impact negatively, and the impact has already started showing on the federation’s revenues and on the foreign exchange earnings.

“Net oil and gas revenue and influx to the federation account in the first quarter of 2020 amounted to N940.91billion.

“This represented a shortfall of N125. 52billion or 31% of the prorated amount that is supposed to have been realized by the end of that first quarter.”

“The crisis will only multiply this misery,” she said. “The economic growth in Nigeria, that is the GDP, could in the worst case scenario, contract by as much as –8.94% in 2020. But in the best case, which is the case we are working on, it could be a contraction of –4.4%, if there is no fiscal stimulus.

“But with the fiscal stimulus plan that we are working on, this contraction can be mitigated and we might end up with a negative –0.59%.”

She said: “ The World Bank maintains that the impact of the COVID-19 on Nigeria will lead to severe amplified human and economic cost, which will move the country into a recession.

“ The World Bank planned a proposed package for immediate fiscal relief for the Federal Government. This will also involve policy-based policy budget support for the Federal Government, focusing on measures to maintain macro financial stability and create fiscal space for proposed stimulus.

“The World Bank package has also got a proposal of $1.5 billion for the states and this package will be dedicated to the states. And it will be a programme for results which the states are already used to implementing.

“So, the immediate fiscal relief for the states, as stated in the presentation, will include the acceleration of an existing programme to enable disbursement by end of September.

“So, the proposed $1.5 billion plan will by end of September it would have been disbursed to the states. We are looking at an average of between N150billion to N200billion based on the plan to the 36 states.

 

“These are states that have already made some particular commitments and achievements so that they will be able to get immediate disbursements of parts of these funds.