BREAKING: FG, States plan to work together on economic sustainability

Mr. Laolu Akande, is a Senior Special Assistant to the President on Media and Publicity to the Office of the Vice President, Yemi Osinbajo. He made the following known at the end of the first NEC virtual Meeting on Thursday, 21 May 2020.

The National Economic Council, in its first virtual meeting, sets up Committee to liaise with Presidential Task Force on reopening the economy across the country.

Members of the National Economic Council rose from their first virtual meeting today, Thursday, 21 May 2020, with a resolution to ensure a more effective synergy between the Federal Government and the sub-nationals especially in matters related to the fallouts of the COVID-19 pandemic, including how to effectively and efficiently reopen the Nigerian economy after the lockdowns and shutdowns across the country.

Chaired by Vice President Yemi Osinbajo, SAN, the Council, composed of all the 36 State Governors, the FCT Minister, Central Bank Governor and other top officials of the Federal Government, specifically decided today to set up a lean committee of seven to work with the Presidential Task Force on COVID-19.

The Committee to be led by Delta State Governor, Dr. Ifeanyi Okowa, also includes the Governors of Lagos, Kano, Bauchi, Anambra, Plateau, and the FCT Minister.

According to the Vice President, the Committee will ensure that there would be an even more effective collaboration and coordination between the Federal Government’s Presidential Task Force and the States of the Federation including the FCT.

Besides, NEC also resolved to cooperate with the Economic Sustainability Committee set up by the President and chaired by the Vice President in the development of a national Economic Sustainability Plan.

Such a plan is expected to introduce a substantial stimulus package running into a couple trillion Naira, ensure that Nigeria as a country gets through the COVID-19 economic challenges and in fact chart a path of growth and development for the Nigerian economy by ensuring massive productivity in several sectors including agriculture, power, infrastructure, technology and several others.

To this end the NEC resolved to hold a meeting next week with the ESC. The Council would be represented at the meeting by its earlier constituted Special COVID-19 Committee.

This was resolved after the Finance Minister made a presentation at the NEC meeting regarding the ESC and related issues.

Below are the other highlights of today’s NEC meeting:

1. UPDATES FROM THE FINANCE MINISTER:

The Hounorable Minister of Finance, Budget, and National Planning gave Council an update on the under listed accounts as follows:

EXCESS CRUDE ACCOUNT (ECA): Balance as at 21st May 2020 – $72,406,791.52
STABILIZATION ACCOUNT: Balance as at 21st May, 2020 - N39, 337,123,485.30
NATURAL RESOURCES DEVELOPMENT FUND ACCOUNT: Balance as at 21st May, 2020 - N125, 190,251,907.47

Also, the Minister of Finance, Budget and National Planning make a presentation on structures created to tackle the challenge of COVID-19 in Nigeria:

In the presentation, the Minister stated that Nigeria is faced with perhaps the most challenging economic challenge in its history. The global economy is also facing its sharpest reversal since the great depression and these have health and economic implications.

On Economy, she noted that COVID-19 has resulted in the collapse in oil prices, stressing that this will impact negatively on Federation revenues and Foreign exchange earnings.

The Minister said the net oil and gas revenue inflows to the federation account in Q1 2020 amounted to N940.91 billion. This represents a shortfall of N425.52 billion (or 31.1% of the prorated amount).

To prevent a deep recession arising from the COVID-19 economic crisis, the orthodox approach all over the world, which is also in the works in Nigeria is to deploy a stimulus package, according to the Finance Minister

Furthermore, the Minister of Finance, Budget, and National Planning briefed the meeting on the forthcoming economic sustainability plan and initiatives:

The President established a number of structures to respond to the COVID-19 pandemic in Nigeria. These were the Presidential Task Force on COVID-19, the Crisis Management Committee and the Economic Sustainability Committee.

The Federal Government is committed to supporting the financial viability of States including the suspension of payments in respect of ISPO and moratorium on deductions in respect of bailout loans, with effect from April 2020.

The Economic Sustainability Committee is responsible for providing overall strategic vision, policy direction and general oversight of implementation, amongst others.

There was another presentation on Nigeria COVID-19 action recovery and economic stimulus program (Nigeria Cares) program concept and design by the World Bank Country representative:

The Presentation focused on channels of the impact of COVID-19 on the Nigerian Economy and the current response from Government and Partners, especially the proposed World Bank Support.

The presentation commended the Government of Nigeria for taking important measures in response to the COVID -19 impact.

These measures included a fiscal stimulus package- COVID-19 intervention fund of N500 billion (US$1.4 billion)- supports healthcare facilities, provide relief for taxpayers and incentives employers to retain and recruit staff during the lockdown; the increase of Social register by 1 million households to 3.6million for cash transfer program and palliatives and social Safety Net Program.

The Word Bank planned a proposed Support package for immediate Fiscal Relief for the Federal Government. This would involve policy-based budget support for the Federal Government focusing on measures to maintain macro-financial stability and create the fiscal space for a pro-poor stimulus package.

The World Bank’s package also proposed financial support to the Government of Nigeria. This support is dedicated to State governments’ budgeted program of expenditures and interventions.

The Honourable Health Minister in his own presentation make an update on polio eradication and support to community transmission of COVID-19:

Council received an update on Polio Eradication and Support to Community Transmission of COVID-19 from the NPHCDA, presented by the Honourable Minister of Health.

The update indicated that Nigeria is edging towards Polio eradication and is on course to be certified as Wild- Polio free by the WHO African Region next month, June 2020. It also reported that no WPV cases were reported in Nigeria for 44 months.

State Governors were urged to facilitate the establishment of structures to coordinate efforts to stop community transmission of COVID-19.

Lastly, there was a presentation on NEC Ad-hoc Committee to review the status of the ownership structure of the Electricity Power Distribution Companies (Discos) by the Governor of Kaduna State.

The report has been delivered, adopted and now being implemented especially through the composition by the President of a Power Sector Reform Working Group headed by the Vice President.