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

• 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.”