The Federal government says it is currently addressing the problem caused by the COVID-19 pandemic and the resulting recession with fiscal and monetary incentives.
This was stated at the weekend in Abuja by the Minister of state for budget and National planning, Prince Clem Ikanade Agba.
He also expressed optimism that the Federal government’s review of the 2020 budget was not intended to bring hardship to the people of Nigeria, but to mitigate the impact of this difficult time.
According to AGBA, the administration of President muhammadu Buhari was considering measures that could accelerate economic recovery after the devastating effects of the COVID-19 pandemic and the looming global recession.
He noted that the main concern of the government is how to ensure that existing jobs are preserved and new ones created, even if the administration is looking at how to save lives; how to protect our economy from the devastating effects of the pandemic by reducing the impact of vulnerability factors.
“All over the world, economies, even those that were strong, were going into recession.
This time we didn’t have enough financial buffers, as we did as a nation in 2015.
“So the challenge was how to keep our recession short and shallow; how to stimulate growth to ensure a rapid recovery, not just a U-shaped recovery, but a V-shaped recovery, and how to build resilience in the future after learning some lessons.
“What fundamental things did we need to put in place? We had to have some incentives-both fiscal and monetary and also try to deal as much as possible with the real sector and the implementation issue, so that we could stimulate economic growth.”
The Minister spoke as one of the panelists on “the impact of COVID-19 on the economy, especially on the 2020 and 2021 budgets” during a live discussion program -” radio communications” – tracked on Nigeria’s Capital FM 92 radio.9 at the weekend in Abuja.
“The budget review should not have been accompanied by austerity measures. It was about moving resources to areas that could have a greater impact on us, such as health, agriculture, building and maintaining our highways, creating jobs for our youth and women, artisanal miners, supporting MSMEs, helping critical sectors of the economy, and others.
He explained that contrary to the claims of some quarters that the revision of the budget for 2020 led to a massive reduction in budget allocations, “in fact, we have invested in the budget much more than in the original budget, so we are talking about incentives.”
“We are not talking about budget cuts. For example, the health sector received $ 186 billion more than in the original budget.”He said that the government’s priority also includes supporting the social sector, the health sector and the education sector, as well as building capacity by training young people and women.
AGBA noted that the restructuring and renaming of the Ministry of communications in July last year to the Ministry of communications and digital economy reflects the government’s new priority.
He said that in addition to the crisis management Committee, chaired by the Minister of Finance, budget and national planning, and the presidential task force (PTF), chaired by the Secretary of the government of the Federation (SGF), there is an economic sustainability Committee, headed by the Vice-President, that deals with various economic sustainability programs.
The Minister said that these programs include agriculture, Recalling that the closure of borders should encourage the consumption of locally produced rice and local farmers.
He said that there is an ongoing strategy for providing solar power to five million homes in sustainable development plans, pointing out that the National Agency for science and engineering infrastructure (NASENI) is working on this, and Nigerians will be taught how to install and repair solar panels.
AGBA, responding to a question about the sharp drop in oil prices, explained that when “we had a pandemic that reduced the demand for oil and led to a glut of the market, it affected Nigeria and Nigerians, the first thing that Mr. President did on March 9 of this year was to set up a crisis management Committee to consider measures to overcome the financial pressure caused by the fall in oil prices at that time.
“After that, the President also established the PTF, which mainly dealt with the health aspect of the pandemic, and then the Committee on economic sustainability, chaired by the Vice President.
“There is no doubt that the pandemic has had a big impact on our economy, since the initial forecasts were not fulfilled. For example, oil production was initially expected to be 2.18 million barrels per day.
This figure was revised downward to about 1.8 million barrels per day. “At the time of the adoption of the budget for 2020, the price of oil was set at $ 57 per barrel.; but today we have about $ 28 per barrel. All of this has implications for revenue.
So, one of the urgent measures we took was to increase the exchange rate from N305 to N360 per dollar to help in revenue forecasting.
“He said that under the original budget, revenues were forecast at N8. 57 trillion, adding that the Federal government is now looking at N5 trillion, a decrease of about 32 percent.