The Authority of the National Assembly spearheaded by His Excellency, Ahmad Ibrahim Lawan, this past week, held a meeting with some Ministers and Heads of agencies from the Executive arm of Government to brainstorm on the impact of Coronavirus pandemic on the Nigerian economy.
The meeting which reviewed the impacts of coronavirus and the fall in oil price on the Nigerian Economy was summoned by the National Assembly to particularly discuss the proposed review of the 2020 budget, the Medium Term Expenditure Framework and plans to cushion the impacts.
Senate President Ahmad Lawan, who presided over the meeting lasting over four hours said that an immediate review of the 2020 budget and Medium Term Expenditure Framework is imperative, particularly against the backdrop of the impact of the Coronavirus pandemic on the global economy.
In her presentation, the Minister of Finance, Zainab Ahmed, explained that “prior to COVID-19 and Oil price decline, the Nigerian economy was already fragile and vulnerable.”
According to her, due to the global economic downturn precipitated by the impact of the Coronavirus pandemic, international Oil prices plunged as low as $22 (USD) per barrel on the international market.
She added that the impact of the pandemic which resulted in international crisis created a disruption in travel and trade, and put “increasing pressure on the naira and foreign reserves as the crude oil sales receipts decline and the country’s micro-economic outlook worsens.”
Ahmed said that in view of Nigeria’s economic realities, the Crisis Management Committee constituted by the president in response to COVID-19 and Oil Price Decline expressed concern that “both issues may be magnified if a severe outbreak of the pandemic occurs in Nigeria.”
accordingly, the Minister proposed a review of the 2020 budget using a US$30 per barrel price benchmark as against USD$57 initially passed in December, to prepare for the worst-case scenario, as well as insulate the Nigeria economy against any form of unexpected crisis.
She also said told that budgeted revenues for Nigeria Customs Service have been reduced from N1.5trn to N94bn “due to anticipated reduction in trade volumes; and privatization proceeds to be cut by 50 percent, based on the adverse economic outlook on sales of the assets.
Similarly, Ahmed disclosed that the Federal Government has undertaken cuts to Revenue-related expenditures for the Nigerian National Petroleum Corporation (NNPC) for several projects included in the 2020 Appropriation Act passed by the National Assembly in December 2019.
The Federal Government is working on Fiscal Stimulus Measures to provide fiscal relief for Taxpayers and key economic sectors; incentivize employers to retain and recruit staff during the economic downturn; stimulate investment in critical infrastructure…review non-essential tax waivers to optimize revenues, and complement monetary and trade interventions to respond to the crisis,” the Finance Minister disclosed.
She added that the Federal Government had made provision for health sector interventions by introducing import duty waivers for essential input for pharmaceutical firms; tax waivers on new equipment; and deferment of tax to increase production.
Ahmed further disclosed that the FG would be releasing the total sum of N6.5 billion in two tranches (N1.5 billion and N5 billion) to the National Centre for Disease Control (NCDC) as intervention to assist in the fight against the spread of the COVID-19 disease in Nigeria.
Also, she stated that the Lagos State Government would receive financial support from the Federal Government to the tune of N10 billion to combat Coronavirus spread in the state.
In addition, she informed the lawmakers that Nigeria had received a grant of US$18.2 million from Japan for strengthening seven National Centre for Disease Control (NCDC) centres across the country.
The Finance Minister said that the sum of one billion naira would be released by government to Pharmaceutical firms in the country.
In his presentation, CBN Governor, Godwin Emefiele said, “while we expect to see a decline in expected growth projection for 2020 relative to 2019, the exact impact will be dependent on how well coronavirus is contained over the next months, and how long low oil prices persist.”
