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Nigeria’s Economy Could Contract by 8.9% in 2020 -Finance Minister

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Zainab Ahmed
  • Nigeria’s Economy Could Contract by 8.9% in 2020 -Finance Minister

The Nigerian Minister of Finance, Budget and National Planning on Thursday said Nigerian economy could contract, in the worst-case scenario, by as much as 8.94 percent this year, according to ThisDay.

Ahmed said, in the best case, the economy could contract by 4.4 percent with a well-structured stimulus package, higher than the 3.4 percent contraction predicted by the minister in April and later by the International Monetary Fund.

Speaking after the National Economic Council (NEC) meeting, presided over by Vice President Yemi Osinbajo in the State House on Thursday, the finance minister said the nation lost N125.52 billion in revenue to COVID-19 headwinds in the first quarter.

She further stated that the current 40 percent poverty rate could increase with the reduction in revenue generation as government’s efforts at curbing poverty may suffer as a setback.

“This represented a shortfall of N125. 52 billion or 31 per cent of the prorated amount that was supposed to have been realised by the end of that first quarter. Forty per cent of the population in Nigeria, today, are classified as poor. The crisis will only multiply this misery,” Ahmed stated.

“The economic growth in Nigeria, that is the GDP, could in the worst-case scenario, contract by as much as 8.94 per cent in 2020. But in the best case, which is the case we are working on, it could be a contraction of –4.4 per cent if there is no fiscal stimulus. But with the fiscal stimulus plan that we are working on, this contraction can be mitigated and we might end up with a negative -0.59 per cent.

“As a result of that, the president set up the Presidential Economic Sustainability Committee in addition to the COVID-19 Response Committee that has been set up, the presidential task force that is chaired by the SGF as well as the Crisis Management Committee that I chair.”

She added that “The federal government is committed to supporting the financial viability of states, including the suspension of payments in respect of commitments, debts that have been secured with ISPOs by the states at the federal levels. So, we have already implemented suspension of deductions of a number of loans that have been taken by the states from April and also in May.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

Prepaid Meter is Free, Buhari Warns DisCos, Agents

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prepaid meter

President Muhammadu Buhari once again warned Power Distributing Companies (DisCos) and their agents selling prepaid meters to electricity customers against the Federal Government directive that meter is free.

Ahmed Rufai Zakar, the Special Adviser to the President on Infrastructure, who represented Buhari at the FGN/NLC-TUC ad-hoc committee on electricity tariff stakeholders held in Ibadan, Oyo State on Wednesday, said President Buhari understood people’s concerns on issues surrounding electricity and was determined to curb and deal with unscrupulous individuals in the power sector.

He said, “We have made it very clear through the regulators direct order as well as intervention from the Ministry of Power that the meters are to be provided to Nigerians at no cost.

“Even for meters that were paid for, there is the directive from the regulator to the discos that they would need to find a way to reimburse those citizens over time.

“In cases where we find any disco or disco representative selling the meters or exploiting Nigerians to be able to get meters by paying, we would take the full measures of the law.

“The President has mandated that these meters must be free. We have also said that they must come from local manufacturers.

“This would create jobs and revive our industry.”

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Economy

Nigeria’s Real Estate Sector Shrinks by 8.06% in the Third Quarter -NBS

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Economic uncertainty plunged Nigeria’s real estate sector by 8.06 percent in the third quarter of the year, according to the National Bureau of Statistics (NBS).

Nigeria’s statistics office said “In nominal terms, real estate services recorded a growth rate of –8.06 per cent in the third quarter of 2020, indicating a decline of –11.78 per cent points compared to the growth rate at the same period in 2019, and by 9.12 per cent points when compared to the preceding quarter.

“Quarter-on-quarter, the sector growth rate was 18.92 per cent.

“Real GDP growth recorded in the sector in Q3 2020 stood at -13.40 per cent, lower than the growth recorded in third quarter of 2019 by –11.09 per cent points, but higher relative to Q2 2020 by 8.59 per cent points.

“Quarter-on-quarter, the sector grew by 17.15 per cent in the third quarter of 2020.

“It contributed 5.58 per cent to real GDP in Q3, 2020, lower than the 6.21 per cent it recorded in the corresponding quarter of 2019.”

Nigeria’s economy contracted by 2.48 percent in the first nine months following a 6.10 percent and 3.62 percent contraction in the second and third quarters respectively.

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Economy

Nigeria Requires N400 Billion Annually to Maintain Federal Roads -Senator Bassey

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lekki

The Chairman of the Senate Committee on road maintenance, Senator Gersome Bassey, on Friday said Nigeria requires about N400 billion annually to maintain federal roads across the country.

The Senator, therefore, described the N38 billion budgeted for road repairs in the 2021 proposed Budget as grossly inadequate. According to him, nothing meaningful could be achieved by the Federal Roads Maintenance Agency (FERMA) with such an amount.

He said, “For the 35 kilometres federal roads in the country to be motorable at all times, the sum of N400bn is required on yearly basis for maintenance.”

Bassey “What the committee submitted to the Appropriation Committee in the 2021 fiscal year is the N38bn proposed for it by the executive which cannot cover up to one quarter of the entire length of deplorable roads in the country.

“Unfortunately, despite having the power of appropriation, we cannot as a committee jerk up the sum since we are not in a position to carry out the estimation of work to be done on each of the specific portion of the road.

“Doing that without proposals to that effect from the executive, may lead to project insertion or padding as often alleged in the media.”

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