BY GRCE ANYANWU, ABUJA – As part of the Federal Government’s desire to address challenges posed by COVID-19 pandemic, a number of State Governments across the country have reviewed their 2020 budgets to align with present realities.
Many of the States have also begun to adopt measures for aggressive diversification of their revenue bases in order to reduce dependency on the diminishing allocations from the Federation Account.
Minister of State, Budget and National Planning, Prince Clem Ikanade Agba, made this known during the 11th virtual Community of Practice (CoP) meeting of Commissioners of Economic Planning, held Tuesday (June 30), in Abuja with the theme: “COVID-19: Strategies for quick Recovery of the Economy.”
Agba noted that, though there had been marginal increase in the price of crude oil in the international market, the cut in daily production quota by OPEC still dwarfed the much-required revenue needed to rejig the weakened economy.
The minister also said that as a result of the rising rate of infections, the continuous global meltdown, the increasing unemployment on account of layoffs in all sectors of economy, the economic growth could contract to about -8.9% in 2020, in the worst-case scenario, and -4.45 in the best-case scenario, without any form of stimulus to the economy.
He stated that in order to prevent a potential deep recession, and accelerate quick recovery of the economy, the Federal Government has approved the total stimulus package of N2.3 trillion.
This package, according to Agba, consisted of N500Billion FGN interventions fund, N1.2trn CBN intervention funds, N334B BoI/Bilateral/Multilateral interventions and additional FGN support of N300B.
According to him, a common feature of these interventions was that they would create a large number of jobs, empower farmers and entrepreneurs, use up to 100% of local materials, conserve foreign exchange and have guaranteed offtake of outputs, especially in agriculture and housing.
He also said that Federal government was taking steps to increase non-oil revenue generation through Value Added Tax (VAT) reforms in the Finance Act 2020, customs administration enhancement, tax incentives and exemptions, increase remittances and recovery of unremitted revenues from Government-Owned Enterprises (GOEs), increase revenues from cross-border business transactions, unlock value from FG assets that were lying idle or under-utilized, among others.
Agba therefore urged States to emulate the economic recovery steps taken by the Federal government by coming up with more policy options for a quick recovery of the economy with the following measures, among others, in mind: adopt a targeted and integrated policy response; deal decisively and proactively with public health safety issues; consider a new 2020 budget across the States to reflect new realities; and, develop sectoral responses that address immediate needs.
Earlier in her remarks, the Permanent Secretary, Budget and National Planning Ministry, Mrs Olusola Idowu, said that the meeting was very significant as it provided participants with the opportunity to chart a new course towards the development of the country amid the COVID-19 pandemic.
Idowu said; “Together, we will strive towards addressing the challenges posed by the novel coronavirus pandemic.”
Present at the meeting were the DG Small and Medium Enterprise Development Agencies of Nigeria (SMEDAN), Dr. Dikko Umaru Radda, Executive Director/CEO, Nigerian Export Promotion Council (NEPC), Mr. Olusegun Awolowo, CEO Bank of Industry, Mr. Olukayode Pitan and National Programme Manager, DFID-PERL, Ifeanyi Peters Ugwuoke, among others.