The Federal Government says a N2 trillion stimulus will soon be injected into the nation’s economy to cushion the effects of the COVID-19 pandemic and the fall in crude oil prices.
The Minister of State for Budget and National Planning, Prince Clem Ikanade Agba, said the funds were being sourced from the Central Bank of Nigeria (CBN), Bank of Industry, other multilateral agencies and foreign grants.
“All in all, when everything is put together, both government funding and the funds we are expected to get from the Central Bank of Nigeria (CBN), Banks of Industry and other multilateral agencies and grants that we are receiving, we expect to get a stimulus of about two trillion going into the economy.
“We are fighting a dual pandemic, both health and economic pandemic. It is no longer a secret that government revenues have collapsed and oil prices have fallen, demand for oil has also fallen and there is a glut in supply and this is generally affecting manufacturing and other non-oil sectors,’’ the minister said on Tuesday.
He spoke at a webinar on “Citizens Dialogue Session on Government Fiscal Policy Decisions to the Fall in Oil Proces and the COVID-19 Pandemic”, organised by the Federal Ministry of Finance, Budget and National Planning and supported by Patnership to Engage, Reform and Learn (PERL) and the UK Department for International Development (DFID).
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, also participated in the virtual meeting.
Agba, in response to a question on what the Economic Sustainability Committee was doing to deal with the pandemic and the fall in crude oil prices, said the committee had outlined five broad policy objectives with which to deal with the problems.
He said: “So for the Economic Sustainability Committee, we have basically looked at some five broad policy objectives. One is how do we save lives in response to the pandemic and support the Presidential Task Force on COVID-19?
“How do we take care of the vulnerabilities that we have in the system? How do we keep our economy off the ravages of this pandemic? That is to say, we know we are going into recession. How do we make it short-lived and shallow?
“How do we ensure that there is quick recovery, and that the recovery is not U-shaped or V-shaped? How do we build resilience going forward? What do we need to do to build the foundation for a long-term growth?
“So basically, the committee has been looking at how to build a resilient health system, provide funding for basic health infrastructure and operations both from government and also from loans which base is on a fund set up by government both led by the commercial banks through the CBN.”
VP Yemi Osinbajo, SAN, is the chairman of the Economic Sustainability Committee.
Agba also explained that the committee was looking at how to create jobs and protect the existing jobs in the next twelve months.
“We are looking at doing massive funding in rural growth, first to ensure that the food that will be produced can get to the market. The Ministry of Agriculture and Rural Development would be working with the sub-nationals to help assist in the acquisition of land for private investors in order to increase that focus on food production.
“Access to land acquisition and then funding, of course, in this area will also be coming from the commercial banks supported by CBN and we will ensure that government gives the guarantee to take off the production in the event that the market is bloated.
“You will recall that we recently released about 70,000 tons from the strategic (grains) reserves and this also needs to be replenished. We are also looking at how to create jobs through the rehabilitation of our major roads. This is a way of boosting the economic activities and also easing transportation of goods and persons.
“To this end, we will be giving additional funding to FERMA to undertake interventions in major strategic roads nationwide. They would also be working around the special agro-industrial processing zone corridors, ensuring that bridges are maintained and streetlights on some of our highways are maintained.
“We are also looking at job creation for the youths. You are also aware that Mr President approved a thousand people to be employed within each local government. There are 774 local governments and this translates to 774,000 jobs across the country. This is going to be for three months starting from October.
“We are also providing additional financing to the Humanitarian Ministry for the cash transfers where one million additional household are being added,’’ Agba added.
“We are also providing support for small businesses, MSMEs, in order to ensure that jobs are protected and ensure that more jobs are created.”
On the aviation sector, he promised government’s assistance or bailout to help it stay afloat, noting that a lot of planes have been parked and it had resulted in about N21 billion loss on a monthly basis.
“We are looking at how to provide some form of bailout support to ensure that the industry does not die.”
On the WASH programme of the Federal Ministry of Water Resources, Agba said it was being looked into with a view to creating jobs and improve hygiene in markets and public places.
He disclosed that a programme on natural gas expansion was being spearheaded by the Petroleum Ministry to promote greater domestic use of natural gas.
“This is one area where we feel a lot of jobs also will be created because people will be trained on how to weld and produce cylinders. There is a lot in the value-chain around this.’’
On efforts to improve power in the country through home solar systems, the minister also noted that the National Agency for Science and Engineering and Infrastructure had commenced work on it.
“There are private companies that are interested to come and set up here to produce solar panels in the country and we believe a lot of local production can take place and skills also being transferred.
“We will ensure that about five million homes that are off-grid are provided with solar system and this is being driven by the Federal Ministry of Power,” he stressed.
On mass housing, the minister said the use of local materials was being promoted which, according to him, will also create employment.
He explained: “We also expect that from about June, the states might begin to feel the effects of low revenue coming from oil and, therefore, might be having challenges in meeting up with obligations, especially the payment of salaries.
“Of the $2.5 billion facilities from the World Bank, about $1 billion of it will be going to the States as loans. These are concessionary loans. Mr President has already approved N850 billion loan from domestic capital market.
“He has also approved $150 milion to be taken from the Sovereign Wealth Account in support of FAAC.
“We are also looking at suspending deductions in respect of the budget support funding which was provided to the States as a way of easing burden.’’
“So, discussions are on with the CBN as to provide moratorium on the deductions in respect of the bailout loans.
“Already, N10 billion has been given to support Lagos State; we also have additional provisions to cover the remaining 35 states and the Federal Capital Territory,’’ Agba said.