COVID-19: Nigeria to lose N185bn monthly – Osinbajo’s committee

Juliana Taiwo-Obalonye, Abuja

Measures put in place to curb the spread of COVID-19, including lockdown and social distancing, have had severe impact on farms and factories, trade, transport and tourism.

Vice President Yemi Osinbajo, who made the disclosure during the submission of the report of the Economic Sustainability Committee (ESC) to President Muhammadu Buhari in Abuja, yesterday, said several projections, including those by the Nigerian Bureau of Statistics (NBS) on behalf of the ESC, showed severe downturn in the country’s oil earnings such that, even with oil price at $30 a barrel, Nigeria would still have a shortfall of about N185 billion every month in the amount available for allocation to the three tiers of government.

He said unemployment might rise to 33.6 per cent or about 39.4 million people by the end of 2020 and, if the country failed to take prompt preemptive measures, millions more would fall into extreme poverty before the pandemic ends. He said GDP may fall to between minus 4.40 per cent and minus 8.91 per cent, depending on the length of the lockdown period and strength of economic response.

The Osinbajo-led ESC was saddled with the responsibility to respond to the disruptions and dislocations caused by the COVID-19 pandemic as well as develop a credible sustainability plan for repositioning the economy now and post-COVID-19.

Osinbajo said the committee decided on a strategy hinged on President Buhari’s mantra to “produce what we eat and consume what we produce.”

To create millions of new jobs, Osinbajo said: “We need to focus on encouraging local production, local services, local innovation and emphasise the use of local materials. Nigeria and Nigerians can produce our food, build our houses and construct our roads, using local materials in all cases.

“If we must import, it must be to support local production. We have, therefore, recommended that we must carry out mass programmes that create jobs and utilise local materials. Such will include mass agricultural programme, which is expected to bring between 20,000 and 100,000 hectares of new farmland under cultivation in every state of the federation and create millions of direct and indirect job opportunities, extensive public works and road construction programme focusing on both major and rural roads and using locally available materials like limestone, cement and granite, mass housing programme to deliver up to 300,000 homes annually, engaging young professionals and artisans who form themselves into small and medium-scale businesses within the construction industry, using indigenous labour and materials. Installation of solar home system targeting five million households, serving about 25 million individual Nigerians who are currently not connected to the national grid.”

Osinbajo said the committee also recommended support for local production and manufacturing of items like tech apps, software, shoes, garments, steel fabrication, ceramics and furniture, with the required capital and essential machinery.

“The provision of ample support for the informal sector through low-interest loans and by easing procedures for registration, licensing, obtaining permits, etc. By these means, urban and informal business people like mechanics, tailors, artisans, and petty traders will be encouraged to improve and develop their services. Support for MSMEs, especially in assisting to restructure their loans with banks. Among others, this will assist businesses in the pharmaceutical, aviation, hotels and the hospitality industry, private schools, road transportation, technology companies, and the creative industry, among others.

“Facilitation of broadband connectivity across the country and creation of a wide variety of technology and ICT jobs. Expansion of the Social Investment Programme, through an increase in the number of cash transfer beneficiaries, N-Power volunteers and sundry traders enjoying small and micro loans through the MarketMoni and TraderMoni schemes. The preexisting conditional cash transfer will also be extended to cover a larger number of the extremely poor.”

The Vice President said the key to the success of this plan was in its implementation.

“We have, therefore, recommended that each minister will be responsible for supervising the implementation of plans situated in their respective ministries. The ministers will also be responsible for ensuring synergy between all relevant stakeholders across the public and private sectors. The Economic Sustainability Committee, which is inter-ministerial in nature, should only then remain to oversee plan implementation, ensure inter-ministerial co-ordination, and report regularly to the President, while expenditure is monitored through the National M&E framework and the Budget Office of the Federation,” he said.

President Buhari, in his response, said though his administration had in January begun the process of taking out 10 million Nigerians out of poverty, by March, the world was in serious crisis on health and the economic front.