- Says Nigeria losing N185bn oil revenue monthly
- Buhari gets report, optimistic about strong economy
Omololu Ogunmade in Abuja
A report by the Economic Sustainability Committee (ESC), chaired by Vice President Yemi Osinbajo, has projected that unemployment in Nigeria may rise to 39.4 million or 33.6 per cent in December.
It also predicted a monthly oil revenue loss of N185 billion for the country.
Osinbajo presented the committee’s report to President Muhammadu Buhari thursday in Abuja.
The president set up the committee on March 30 to come up with economic sustainability plan as a response to challenges posed to the economy by the COVID-19 pandemic.
The committee was also constituted to come up with monetary policy measures in support of the plan; provide a fiscal/monetary stimulus package, including support to private businesses (with emphasis on strategic sectors most affected by the pandemic) and vulnerable segments of the population.
Other mandates of the committee included identifying fiscal measures aimed at enhancing distributable oil and gas revenue; increasing non-oil revenues and reducing non-essential spending towards securing sufficient resources to fund the plan; articulating specific measures to support the states and the Federal Capital Territory (FCT); proposing a clear-cut strategy to keep jobs and create opportunities for new ones as well as identifying measures that may require legislative support to deliver the plan.
Presenting the report tagged: “Bouncing Back: The Nigerian Economic Sustainability Plan,” at a forum attended by some ministers at the State House, Osinbajo said even if the price of crude oil in the international market stabilised at $30 per barrel throughout the year, Nigeria would still lose N185 billion monthly.
According to the vice president, millions of Nigerians will slide into extreme poverty by the time the COVID-19 pandemic ends while the gross domestic product (GDP) rate may fall to as low as -4.40 per cent and minus -8.91 per cent, depending on the duration of the lockdown as well as the strength of the country’s economic response.
He said: “In addition, the inevitable mandatory lockdowns and social distancing measures put in place to curb the spread of COVID-19 have had a severe negative impact on farms and factories, as well as on trade, transport and tourism.
“Several projections, including those done by the NBS on behalf of the Economic Sustainability Committee, showed: (i) a severe downturn in our oil earnings, as a result of which, even with oil price at 30 dollars a barrel, we would still have a shortfall of about N185 billion every month, in the amount available for allocation to the three tiers of government; (ii) that unemployment may rise to 33.6 per cent or about 39.4 million people by the end of 2020, if we fail to take prompt preemptive measures; (iii) that millions more will fall into extreme poverty, before the pandemic ends; (iv) that GDP may fall to between minus 4.40 per cent and minus 8.91 per cent depending on the length of the lockdown period and strength of our economic response.”
In addressing the looming doom, the vice president said his committee had opted to explore a strategy hinged on the president’s mantra to “produce what we eat and consume what we produce.”
He said if the government would succeed in creating new jobs, it must encourage local production, with local services, local innovations and the use of local materials to produce foods, build houses and construct roads.
According to him, import in this situation must only be allowed to support local production while mass programmes aimed at creating jobs and making use of the local materials must be evolved.
He listed such programmes to be evolved to create jobs to include: mass agricultural programme, extensive public works and road construction programme, installation of solar home system, targetting five million households and serving no fewer than 25 million Nigerians not connected to national grid.
The vice president enumerated other measures aimed at cushioning the effects of the pandemic to include: support for local production and manufacturing, provision of ample support for informal sector through low interest loans and easing procedures for registration, licensing and obtaining permits.
Others as recommended by the Osinbajo committee are support for urban and informal business people, MSMEs, especially such support that will support loan restructuring with banks, facilitation of broadband connectivity across the country and creation of a wide variety of technology and ICT jobs as well as expansion of Social Investment Programme, among others.
“Such will include: a Mass Agricultural Programme, which is expected to bring between 20,000 and 100,000 hectares of new farmland under cultivation in every state of the federation and create millions of direct and indirect job opportunities.
“Extensive Public Works and Road Construction programme focusing on both major and rural roads and using locally available materials like limestone, cement and granite.
“Mass Housing Programme to deliver up to 300,000 homes annually, engaging young professionals and artisans who form themselves into small and medium scale businesses within the construction industry, using indigenous labour and materials. “Installation of solar home system, targetting five million households, serving about 25 million individual Nigerians who are currently not connected to the national grid.
“We have also recommended -(i) support for local production and manufacturing of all that is possible, including tech apps, software, shoes, garments, steel fabrication, ceramics and furniture, with the required capital and essential machinery, (ii) the provision of ample support for the informal sector through low interest loans and by easing procedures for registration, licensing, obtaining permits, etc.
“By these means, urban and informal business people like mechanics, tailors, artisans, and petty traders, will be encouraged to improve and develop their services; and (iii)Support for MSMEs, especially in assisting to restructure their loans with banks. “Among others, this will assist businesses in the pharmaceutical, aviation, hotels and the hospitality industry, private schools, road transportation, technology companies, and the creative industry, amongst others.
“Facilitation of broadband connectivity across the country and creation of a wide variety of technology and ICT jobs.
“Expansion of the Social Investment Programme, through an increase in the number of cash transfer beneficiaries, N- Power volunteers and sundry traders enjoying small and micro loans through the MarketMoni and TraderMoni schemes.
“The preexisting conditional cash transfer will also be extended to cover a larger number of the extremely poor,” he said.
Osinbajo explained that if success is expected from these plans, the secret will rest on their implementation, “faithful execution of the plans,” adding that to achieve this, every minister will be responsible for supervision of the implementation plans in their respective ministries.
He said ministers would be responsible for building synergy among stakeholders in both the public and private sectors while the ESC would only oversee the implementation plan, “ensure inter-ministerial co-ordination, and report regularly to the president, while expenditure is monitored through the National M&E framework and the Budget Office of the Federation.”
Thanking the president for the confidence reposed in the committee to do the job, Osinbajo said the committee was confident that if the proposals were adopted and thoroughly implemented, “Nigeria will avert the worst of the impending economic headwinds, and convert this crisis to a victory for the Nigerian economy.”
In his remarks, Buhari congratulated the committee on the report, saying he was pleased by the job done, particularly that it had extensive consultations with relevant institutions.
He expressed faith in the recommendations, adding that the proposals will serve the country’s desire for a truly competitive economy.
“I am pleased to hear that the Economic Sustainability Committee consulted with both the National Economic Council and the National Assembly and I look forward to a continuing partnership with both organs, to implement what I consider a national plan.
“As we go forward, we must chart a new course and remain steadfast. I believe the priorities contained in this plan present a practical way of achieving our desire of a truly competitive economy that can support our people and secure our future.
“I congratulate the Economic Sustainability Committee for completing this critical national assignment in good time. I believe that with God’s help and in a sense of duty to prosperity we will successfully reset our economy for a brighter future,” he said.
Buhari described the COVID-19 pandemic as a trying time, particularly for operators in the informal sector.
He noted that the pandemic has taken a huge toll on the economy as businesses have slowed down.
He commended Nigerians for their resilience during the pandemic and also praised health workers, describing their efforts in containing the pandemic as super human.
He said: “While the COVID-19 pandemic spread through our towns and cities, it continues to take a massive toll on the economy. I know that many of us have experienced great difficulty during this time, businesses have considerably slowed down and in certain instances, operations closed, work days have been cut short and personal liberties restricted, people have lost their jobs and earning a living has indeed been difficult.
“This has been a trying time for those in the informal sector, which constitutes a large part of our economy, important family celebrations were held without the presence of loved ones, schools are closed and parents have had to resort to home schooling in addition to juggling other responsibilities.
“Despite all these, Nigerians have done their best and persevered. I must salute Nigerians for their resilience in adapting the realities of the COVID-19 effect while also recognising the super human effort of our frontline health workers who continue to play a critical role in keeping our country and people safe.”