From Juliana Taiwo-Obalonye, Abuja
President Muhamadu Buhari has attributed Nigeria’s early exit from the economic quagmire ocassioned by the COVID-19 pandemic to the Federal Government’s N2.3 trillion stimulus package.
He made the disclosure in Jos, Plateau State, during the graduation ceremony for Senior Executive Course (SEC) 43 participants of the National Institute for Policy and Strategic Studies (NIPSS).
Represented by Vice President Yemi Osinbajo, Buhari who noted that the damage done to the economy by the pandemic and the global lockdown was enormous, disclosed that the economic agenda was still in place.
According to him, Nigeria was in talks with the World Bank to raise $30 million to establish bio vaccine plants in the country to facilitate local production of the COVID-19 vaccine.
He added that the country’s GDP contracted to 6.10 per cent during the second quarter of 2020, even as oil price at one point went down to as low as about $10 per barrel before it finally settled at about $45 per barrel during the second quarter of 2020 as a result of the pandemic.
“Unemployment went up to 33.3 per cent in the fourth quarter of 2020. The transportation sector declined by 49 per cent, the hospitality sector fell 40 per cent, the education sector fell 24 per cent, real estate declined by 22 per cent, trade declined by 17 per cent and construction declined by 40 per cent.
“Nigeria was in a terrible economic situation and in response, the president took two swift steps; one was to set up a small inter-ministerial Committee headed by the Minister of Finance, Zainab Shamsuna Ahmed, to quickly work out the implications and the immediate mitigation for the economic shocks we were headed for.”
Osinbajo, stated that the second thing the president did swiftly was to direct a team of ministers and inter-agency heads to draw up a 12-month economic emergency plan, which became known as the Economic Sustainability Plan.
“We were clear that the only way of avoiding an economic disaster that could last for years was for the government to essentially put forward a major fiscal stimulus plan. Such a plan must have clear objectives of saving jobs and creating new ones, supporting businesses that may close down, and employees that may not be paid during lockdowns, and, of course, healthcare support to reduce the COVID-19 caseload. So we promptly put forward a stimulus plan in the order of N2.3 trillion.
“We took quick fiscal measures including grant of additional moratorium of one year on CBN intervention facilities; reduction in the interest rate on intervention facilities from nine to five per cent; grant of regulatory forbearance to banks to give borrowers some breathing space, including through restructuring of outstanding debts.
“The CBN also reports the disbursement of N798billion to 3.9million smallholder farmers under the Anchor Borrowers Programme, N134.6 billion to 38,140 beneficiaries under AGSMEIS and N343billion to 726,158 beneficiaries, the release of N1trillion to 269 real sector projects, and N103 billion disbursed to 110 healthcare projects,” he added.
He said the main fiscal policy challenge facing Nigeria was inadequate revenues especially in the face of lower oil revenues.
He said it was essential to improve tax administration, vigorous collection of all revenues due to the federal government from its Ministries, Departments, and Agencies; bring all high earning agencies into the federal budget. Concurrently, we must lower customs duties and tariffs on raw materials and intermediate goods used in manufacturing while giving reciprocal, non-tariff-based support like procurement, subsidies, and tax breaks to priority sectors.