Finance, Budget and National Planning Minister Hajia Zainab Ahmed has said that oil and gas revenue for the country, in the first quarter of 2020 suffered a 31% shortfall, representing about N125.52 billion.
In a chat with journalists after the National Economic Council (NEC) meeting on Thursday, Ahmed, said with 40 per cent of Nigeria’s population classified as poor, the looming economic crisis would worsen their misery.
She said: “It is not news any more that these are very difficult and challenging times. We are facing a very significant economic downturn; a time that we have not seen in the history of our country.
“On the economy, COVID-19 has resulted in the collapse in oil prices. 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. 52billion or 31% of the prorated amount that is supposed to have been realized by the end of that first quarter.
The economic growth in Nigeria, that is the GDP, could in the worst case scenario, contract by as much as –8.94% in 2020.
“But, in the best case, which is the case we are working on, it could be a contraction of –4.4%, 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%”, she said.
“The Federal Government is committed to supporting the financial viability of states, including the suspension of payments in respect of commitments, debts that have been secured with ISPOs by the states at the federal levels.
“So, we have already implemented suspension of deductions of a number of loans that have been taken by the states from April and also in May.
“The Economic Sustainability Committee is responsible for providing overall strategic vision, policy direction and general oversight of the implementation amongst others”, she said.
Mrs. Ahmed assorted that the World Bank view is 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 federal government. This will also involve policy-based policy budget support for the FG, 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 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.
“So, the immediate fiscal relief for the states, as stated in the presentation, will include the acceleration of an existing programme to enable disbursement by end of September.
“So, the proposed $1.5billion plan will by end of September it would have been disbursed to the states. 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 funds”, she said.
Giving details of the balances in the various national accounts, the Minister disclosed “in the Excess Crude Account, as at 21 of May, 2020, we reported a balance $72.04 million.
“We also reported to Council that in the Stabilization Account, as at today, we have a balance of N39.337 billion. In the Natural Resource Development Fund Account, as at today, we have a balance N125.19 billion”.