A special package to cushion the effect of the COVID-19 pandemic was on Wednesday unveiled by the Federal Government.
They include: N1 billion bailout for pharmaceutical companies; release of N10 billion to the Lagos State Government to battle the virus – the state has the highest number of victims; and $18.2 million to strengthen the National Centre for Disease Control (NCDC). This cash is a grant from the Japanese government.
Finance Minister Mr. Zainab Ahmed announced the package during a meeting of members of the Executive with the National Assembly leadership.
Mrs. Ahmed solicited the support of lawmakers for the cut in the Budget 2020 expenditure to reflect the present economic downturn caused mainly by the Coronavirus pandemic.
The minister was accompanied to the meeting by Minister of State for Budget and National Planning, Prince Clem Agba, Minister of Petroleum Resources (State), Timipre Sylva, Central Bank of Nigeria (CBN) Governor Godwin Emefiele; Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, and Senior Special Assistant to the President on National Assembly Matters, Senator Babajide Omoworare.
Members of the National Assembly leadership that attended the meeting besides Senate President Ahmed Lawan and Speaker Femi Gbajabiamila, are Deputy Senate President Ovie Omo-Agege; Deputy Speaker, Idris Wase; Senate Leader Yahaya Abdullahi; Leader of the House Ado Doguwa; Deputy Senate Leader, Ajayi Boroffice; Senate Minority Leader Enyinnaya Abaribe; Minority Leader of the House Tony Elumelu; Senate Deputy Whip Aliyu Sabi Abdullahi and Senate Deputy Minority Whip, Philip Aduda.
Others are the Chairman, Senate Committee on Appropriations, Barau Jibrin and the Chairman, Senate Committee on Banking, Insurance and other Financial Institutions, Uba Sani.
Ahmed added that the Federal Government has cut its 2020 revenue projection for the Nigeria Customs Service (NCS) from N1.5 trillion to N943 billion due to the economic downturn caused by the pandemic.
She urged the National Assembly to effect a downward review of the oil benchmark in the 2020 budget from $57 to $30.
Ahmed said: “Prior to COVID-19 and oil price decline, the Nigerian economy was already fragile and vulnerable.”
According to her, due to the global economic downturn precipitated by the impact of the Coronavirus pandemic, international oil prices plunged as low as $22 per barrel on the international market.
She added that the impact of the pandemic which resulted in international crisis created a disruption in travel and trade, and put “increasing pressure on the naira and foreign reserves as the crude oil sales receipts decline and the country’s micro-economic outlook worsens.”
She also told the leadership of the National Assembly that budgeted revenues for the NCS have been reduced “due to anticipated reduction in trade volumes; and privatization proceeds to be cut by 50 per cent, based on the adverse economic outlook on sales of the Independent Power Projects (IPPs) and other assets.”
Ahmed said the Federal Government has undertaken cuts to Revenue-related expenditures for NNPC for several projects included in the 2020 Appropriation Act passed by the National Assembly in December, 2019.
“The Federal Government is working on fiscal stimulus measures to provide fiscal relief for Taxpayers and key economic sectors;
“Incentivise employers to retain and recruit staff during the economic downturn; stimulate investment in critical infrastructure;
“Review non-essential tax waivers to optimize revenues; and compliment monetary and trade interventions to respond to the crisis.”
She added that the Federal Government had made provision for health sector interventions by introducing import duty waivers for essential input for pharmaceutical firms; tax waivers on new equipment; and deferment of tax to increase production.
Emefiele said “while we would expect to see a decline in our expected growth projection for 2020 relative to 2019, the exact impact will be dependent on how well the Coronavirus is contained over the next few months, and how long low oil prices persist.”
Senate President Lawan, who presided over the meeting said: “If we have to review the budget itself, we have to consider the MTEF/FSP.
“Even in sickness, we need government to provide services.
“The impact of COVID-19 is well-known to all of us in terms of health and the economy.
“Here, we will be talking of revenues that we estimated to fund the budget 2020.
“Because the oil price has gone so low due to the impact of COVID-19, the Minister of State should be able to tell us where we will be in the next six months or so.
“We should have concepts that can deliver fast and are sustainable.
“Anything that we do that can not provide succour and relief to our people will lead to catastrophe.”
Speaker Gbajabiamila said: “Taking a cursory look at some of the papers (presentations), I think this meeting is actually very timely and very important because we live in very unusual time and it is time we start thinking outside the box to see how we can stabilise our economy and the direction it is going to take.”