Nigeria strategises to re-open economy

Nigeria’s National Economic Council (NEC) rose from its first virtual meeting on Thursday with a resolution to ensure a more effective synergy to effectively and efficiently reopen the economy after the lockdowns.

Chaired by Vice President Yemi Osinbajo, the Council is composed of all the 36 State Governors, the FCT Minister, Central Bank Governor and other top officials of the Federal Government, specifically decided to set up a lean committee of seven to work with the Presidential Task Force on COVID-19.

The Committee to be led by Delta State Governor, Dr. Ifeanyi Okowa, also includes the governors of Lagos, Kano, Bauchi, Anambra, Plateau, and the FCT Minister.

According to the Vice President, the Committee will ensure that there would be an even more effective collaboration and coordination between the Federal Government’s Presidential Task Force and the States of the Federation including the FCT.

Besides, NEC also resolved to cooperate with the Economic Sustainability Committee set up by the President and chaired by the Vice President in the development of a national Economic Sustainability Plan.

Such a plan is expected to introduce a substantial stimulus package running into a couple trillion Naira, ensure that Nigeria as a country gets through the COVID-19 economic challenges and in fact chart a path of growth and development for the Nigerian economy by ensuring massive productivity in several sectors including agriculture, power, infrastructure, technology and several others.

To this end the NEC resolved to hold a meeting next week with the ESC. The Council would be represented at the meeting by its earlier constituted Special COVID-19 Committee.

This was resolved after the Finance Minister made a presentation at the NEC meeting regarding the ESC and related issues.

Highlights of the NEC’s meeting:

UPDATES FROM THE FINANCE MINISTER:
The Hounorable Minister of Finance, Budget and National Planning gave Council an update on the under listed accounts as follows:
1. EXCESS CRUDE ACCOUNT (ECA)
Balance as at 21st May 2020 – $72,406,791.52

2. STABILIZATION ACCOUNT
Balance as at 21st May, 2020 – N39, 337,123,485.30

3. NATURAL RESOURCES DEVELOPMENT FUND ACCOUNT
Balance as at 21st May, 2020 – N125, 190,251,907.47

OTHER PRESENTATIONS:

PRESENTATION ON STRUCTURES CREATED TO TACKLE THE CHALLENGE OF COVID-19 IN NIGERIA BY MINISTER OF FINANCE, BUDGET AND NATIONAL PLANNING

The Minister stated that Nigeria is faced with perhaps the most challenging economic challenge in its history. The global economy is also facing its sharpest reversal since the great depression and these have health and economic implications.

On Economy, she noted that COVID-19 has resulted in the collapse in oil prices, stressing that this will impact negatively on Federation revenues and Foreign exchange earnings.

The Minister said the net oil and gas revenue inflows to the federation account in Q1 2020 amounted to N940.91 billion. This represents a shortfall of N425.52 billion (or 31.1% of the prorated amount).

To prevent a deep recession arising from the COVID-19 economic crisis, the orthodox approach all over the world, which is also in the works in Nigeria, is to deploy a stimulus package, according to the Finance Minister

BRIEFING ON THE FORTHCOMING ECONOMIC SUSTAINABILITY PLAN AND INITIATIVES BY MINISTER OF FINANCE, BUDGET AND NATIONAL PLANNING

The President established a number of structures to respond to the COVID-19 pandemic in Nigeria. These were the Presidential Task Force on COVID-19, the Crisis Management Committee and the Economic Sustainability Committee.

The Federal Government is committed to supporting the financial viability of States including the suspension of payments in respect of ISPO and moratorium on deductions in respect of bailout loans, with effect from April 2020.

The Economic Sustainability Committee is responsible for providing overall strategic vision, policy direction and general oversight of implementation, amongst others.

PRESENTATION ON NIGERIA COVID-19 ACTION RECOVERY AND ECONOMIC STIMULUS PROGRAM (NIGERIA CARES) PROGRAM CONCEPT AND DESIGN BY THE WORLD BANK COUNTRY REPRESENTATIVE

The Presentation focused on channels of the impact of COVID-19 on the Nigerian Economy and the current response from Government and Partners, especially the proposed World Bank Support.
The presentation commended the Government of Nigeria for taking important measures in response to the COVID -19 impact.
These measures included a fiscal stimulus package- COVID-19 intervention fund of N500 billion (US$1.4 billion)- supports healthcare facilities, provide relief for taxpayers and incentives employers to retain and recruit staff during the lockdown; increase of Social register by 1 million households to 3.6million for cash transfer program and palliatives and social Safety Net Program.
The Word Bank planned a proposed Support package for immediate Fiscal Relief for the Federal Government. This would involve policy-based budget support for the Federal Government focusing on measures to maintain macro-financial stability and create the fiscal space for a pro-poor stimulus package.
The World Bank’s package also proposed financial support to the Government of Nigeria. This support is dedicated to State governments’ budgeted program of expenditures and interventions.

UPDATE ON POLIO ERADICATION AND SUPPORT TO COMMUNITY TRANSMISSION OF COVID-19 BY HONOURABLE HEALTH MINISTER

Council received an update on Polio Eradication and Support to Community Transmission of COVID-19 from the NPHCDA, presented by the Honourable Minister of Health.

The update indicated that Nigeria is edging towards Polio eradication and is on course to be certified as Wild- Polio free by the WHO African Region next month, June 2020. It also reported that no WPV cases was reported in Nigeria for 44 months.

State Governors were urged to facilitate the establishment of structures to coordinate efforts to stop community transmission of COVID-19.

UPDATE ON NEC COMMITTEE ON DISCOS

There was a presentation on NEC Ad-hoc Committee to review status of the ownership structure of the Electricity Power Distribution Companies (Discos) by Governor of Kaduna State.

The report has been delivered, adopted and now being implemented especially through the composition by the President of a Power Sector Reform Working Group headed by the Vice President.