Nigeria’s Minister of Finance, Budget and National Planning, Zainab Ahmed has announced that the Nigerian economy will experience another recession in 2020.
The finance minister however expressed optimism that the effect of the impending recession can be controlled by economic stimulus plans are activated by the Federal and State Governments.
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Zainab Ahmed told journalists after the meeting of the National Economic council on Thursday that the COVID-19 be pandemic has had a serious impact on global crude oil prices which has affected government revenues negatively.
“The impact has already started showing on the federation’s revenues and on the foreign exchange earnings”, she said.
“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 percent of the prorated amount that is supposed to have been realised by the end of that first quarter. 40 percent of the population in Nigeria, today, is classified as poor; the crisis will only multiply this misery.
“The economic growth in Nigeria, that is the GDP, could in the worst-case scenario, contract by as much as minus -8.94 per cent in 2020.
“In the best case, which is the case we are working on, it could be a contraction of minus -4.4 percent, if there is no fiscal stimulus But with the fiscal stimulus plan that we are working on, this contraction can be mitigated and we might end up with a negative –0.59 percent.”
Ahmed noted that the World Bank was ready to help state governments with $1.5bn as an economic stimulus package to help cushion the economic effects of the pandemic in the country.
“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 $1.5 billion 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 implementing.”
She said the implementation of the state economic stimulus package to states will be accelerated so distribution can occur by September.