With the coronavirus pandemic rapidly ravaging the global economy, the federal government is planning to inject N2 trillion as an intervention in the economy, the minister of state for budget and national planning, Clem Agba, has said.
He also said the government would support airlines as the aviation sector loses N21 billion monthly, due to the pandemic.
According to Thisday, Agba disclosed this at a webinar on Tuesday, May 5, 2020. He said the Economic Sustainability Committee has outlined five broad policy objectives with which to deal with the challenges.
“All in all, when everything is put together, both government funding and the funds we are expected to get from the Central Bank of Nigeria, CBN, Banks of Industry and other multilateral agencies and grants that we are receiving, we expect to get a stimulus of about N2 trillion going into the economy.
“We are also looking at how to support the Aviation sector. Like you know, a lot of planes are parked and this is causing almost N21 billion (loss) on a monthly basis. We are looking at how to provide some form of bailout support to ensure that the industry doesn’t die.
“Of the $2.5 billion facilities from the World Bank, about $1 billion of it will be going to the states as loans. These are concessionary loans. Mr. President has already approved N850 billion loan from the domestic capital market” he was quoted as saying
He also said the president has approved that $150 million be taken from the Sovereign Wealth Account, in support of the Federal Account Allocation Committee.
The Central Bank of Nigeria has earlier announced the cuts in the interest rate and provision of N50 billion credit in its first set of policies to cushion the negative impact of the deadly coronavirus on Nigerian businesses and the economy.
The apex bank later injected N1 trillion intervention in all critical sectors of the economy.
Toll on businesses
Since the outbreak of the coronavirus in Wuhan, China, the global economy has been disrupted and shaken downwards.
There have been massive disruptions in supply chains, cancellations of international and local flights and most economic activities have been put on standstill.
Nigeria and other resource-dependent countries appear to be the worst hit, with the virus driving crude oil prices at the international market below approved benchmarks and estimates in Nigeria’s 2020 federal budget.
After adjusting the approved benchmark from $57 per barrel to $30 per barrel, the minister of finance, budget and national planning, Zainab Ahmed, on Tuesday, disclosed the plan of the federal government to further adjust the benchmark crude oil price in the 2020 budget down to $20 per barrel.
“We are in the process of another adjustment that will see us bringing down the revenue indicator (crude oil benchmark) to $20 per barrel,” she said.