Nigerian government’s earnings from oil and gas sector dwindled by N125.52 billion in the first quarter of this year as oil receipts came in trickles into government’s purse in the wake of the oil crash and the coronavirus lockdowns hurt fuel demand.
“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,” Zainab Ahmed, Minister of Finance, Budget and National Planning, told reporters Thursday after the National Economic Council meeting.
“Net oil and gas revenue and influx to the federation account in the first quarter of 2020 amounted to N940.91 billion,” she said, adding that it “represented a shortfall of N125.52 billion or 31% of the prorated amount that is supposed to have been realized by the end of that first quarter.”
Nigeria’s current austerity could deteriorate to a full-blown recession by the turn of the year unless considerable economic stimulus comes to the rescue with Mrs Ahmed believing that the crisis might have the worst implications for Nigeria’s poor population.
“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.
To succour states in their debt service obligations, the Nigerian government is executing a loan repayment holiday on facilities obtained by states between April and this month.
Meanwhile, a lifeline package is in the pipeline at the World Bank to help government finance its budget for this year and attain macro-financial stability.
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,” Ahmed said.
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