Minister of Finance, Zainab Ahmed, has disclosed that global financial institution, the World Bank has presented Nigeria with a proposal of $1.5 billion dollars for states greatly affected by the corona virus pandemic. The proposal is in a bid to curb the economic effects that will follow once the pandemic is over or nearing its end. Speaking after the virtual National Economic Council (NEC) meeting which was anchored from the Presidential Villa on Thursday, May 21, 2020, the minister stated the economic implications of COVID-19 on Nigeria will be severe, and largely expected to move the largest economy in Africa into recession.
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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 FG. 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 1.5billion dollars 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 implementingZainab Ahmed
Speaking further, the minister disclosed that the fiscal relief for the states will form part of an already existing programme, in other to assist in disbursement of the funds by end of September, 2020.
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 fundsAhmed
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Commenting further on the NEC meeting, Ahmed revealed that the finance ministry made a presentation to the council on measures being considered and put in place to tackle the deadly corona virus. She went further to state that the economic situation of the country at the moment is tough, and has not happened in the country’s history before. According to her, the world economy is presently facing sharp economic reversal, something that has not been witnessed since the Great Depression as the consequences extended to the global health structure. She blamed the collapse in oil prices (Nigeria’s main source of revenue) across the globe on the pandemic.
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 N125.52 billion or 31 per cent of the prorated amount that is supposed to have been realised by the end of that first quarter. 40 per cent of the population in Nigeria, today, is classified as poor; the crisis will only multiply this miseryAhmed
Commending the efforts of the federal government towards ensuring the financial viability of states with measures such as the suspension of payments in form of commitments and debts which have been secured at the federal level. The minister revealed that in addition to the COVID-19 Response Committee, the President also set up the Presidential Economic Sustainability Committee, alongside the COVID-19 Presidential Task Force, and the Crisis Management Committee, all in a bid to save the country from the woes associated with the virus.
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