To prevent the economy from slipping into depression as a result of coronavirus pandemic, the Federal Government has again gone cap-in-hand seeking for $7.113 billion external support and funding from multilateral and donor agencies to support its 2020 budget.
In its recent overtures, the Muhammadu Buhari administration had so far approached the International Monetary Fund (IMF), for $3. 4 billion; World Bank ($2.5 billion; African Development Bank (AfDB), $0.5 billion, African Export-Import Bank, $0.5 billion and Islamic Development Bank (IsDB), $1113 million.
In addition, the government is also seeking a moratorium from official partners on bilateral and multilateral debts and arrangement to secure commercial debt relief. Minister of State for Finance Budget and National Planning, Prince Clem Ikanade Agba, who dropped this hint in Abuja at the second virtual Community of Practice (CoP) meeting of the commissioners of economic planning, also noted that there had been marginal increase in the price of crude oil in the international market, but regretted that the daily production cut by OPEC still dwarfs the much-needed revenue.
He said the increasing infections, the continuous global meltdown, the increasing unemployment on account of layoffs in all sectors of the economy, could contract the economy to about -8.9 per cent in 2020, in the worst case scenario and -4.4 per cent in the best case scenario without any form of stimulus package.
“We are also taking steps to increase our non-oil revenue generation. The steps include but not limited to Value Added Tax (VAT) reforms in the Finance Act 2020 (maintaining the increase in VAT rate to 7.5 per cent), customs administration enhancement, tax incentives and exemptions, increase remittances and recovery of unremitted revenues from GOEs, increase revenues from cross- border business transactions, unlock value from Federal Government assets that are lying idle or under-utilised; incentivise the use of up to N2 trillion of pension funds for roads and housing development etc” he said, while urging states to come up with more policy options for a quick recovery of the economy.
He urged the states to consider the adoption of a targeted and integrated policy response, deal decisively and proactively with public health safety issues and consider a new 2020 budget across the states to reflect new realities.
Others measures include, develop sector responses that address immediate needs and ensure that households and Small and Medium Enterprises (SMEs) are catered for, to forestall significant decline in consumer demand and business spending.
