…Unemployment to rise by 33.6%, as Nigeria loses N185bn monthly
…Reps seek radical measures to avert recession, pass 37 bills
By Johnbosco Agbakwuru and Tordue Salem, Abuja
The Federal Government said, yesterday that before the pandemic runs out, millions more Nigerians would be under extreme poverty, while the Gross Domestic Product, GDP, might likely fall between -4.40 per cent and -8.91 per cent, depending on how long the crises will last and the strength of the economic response.
The Federal Government also said Nigeria is recording an average of N185 billion revenue shortfall monthly as a result of the Coronavirus (COVID-19) pandemic.
It disclosed that the economic impact of the COVID-19 pandemic had caused an astronomic rise in unemployment to 33.6 per cent, indicating that about 39.4 million people would be unemployed by the end of 2020 if nothing proactive could be done to arrest the situation.
These, among others, were contained in the report of the Economic Sustainability Plan Committee, entitled “Bouncing Back: The Nigerian Economic Sustainability Plan”, headed by Vice-President Yemi Osinbajo, which was submitted to President Muhammadu Buhari at the Council Chamber, Presidential Villa, Abuja.
Vanguard, last Monday, exclusively reported that Nigeria’s misery index is set for a spike, with more than three million people joining the population of the poor, against the backdrop of the projected contraction of the economy as measured by the Gross Domestic Product, GDP, and the population growth rate.
Government had projected that the economy (GDP) will contract by 4.4 per cent by end of 2020, down from growth of 2.27 per cent in 2019, due mainly, to fallouts of the economic impact of COVID-19.
On the other hand, the population is set to grow by 3.5 per cent, reaching about 218.3 million at year end, though some analysts told Vanguard this is a conservative estimate.
N3.1 trillion loss
Vanguard also reported that decline in GDP growth rate is set to result in loss of about N3.1 trillion to the population’s purchasing power which will equally bring down the per capita GDP to about N312,697, about eight per cent drop from the 2019 figure of N337,550.
Consequently, the declines would precipitate increase in the nation’s poverty index with the number of citizens below poverty line growing to 89.5 million by year end from 86.71 million last year, based on the Nigeria Bureau of Statistics, NBS, 40.1 per cent poverty rate for the country.
On the backdrop of the outbreak of COVID-19 and its impact on the Nigerian economy, President Muhammadu Buhari had set up the Economic Sustainability Plan Committee with the directive to come up with a plan that would provide succour to Nigerians.
Presenting the committee’s report, Osinbajo said measures put in place to curb spread of virus have had severe negative impact on firms and factories, as well as on trade, transport and tourism.
He stated: “Several projections, including those done by the NBS (National Bureau of Statistics) on behalf of the Economic Sustainability Committee showed 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.
“That unemployment may rise to 33.6% or about 39.4 million people by end of 2020, if we fail to take prompt pre-emptive measures; that millions more will fall into extreme poverty, before the pandemic ends; that GDP may fall to between minus 4.40% and minus 8.91%, depending on the length of the lockdown period and strength of our economic response.”
Consequently, Osinbajo said his committee has taken a holistic view of the situation and the reality on ground and decided on a strategy hinged on President Buhari’s mantra to “produce what we eat and consume what we produce,” adding that “to create millions of new jobs, we need to focus on encouraging local production, local services, local innovation, and emphasize the use of local materials. Nigeria and Nigerians can produce our food, build our houses and construct our roads, using local materials in all cases.”
Osinbajo stated: “If we must import, it must be to support local production. We have therefore recommended that we must carry out mass programmes that create jobs and utilize local materials. Such will include:
lA 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.
lExtensive Public Works and Road Construction Programme focusing on both major and rural roads and using locally available materials like limestone, cement and granite.
lMass 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.
lInstallation of Solar Home System, targeting 5 million households, serving about 25 million individual Nigerians who are currently not connected to the National Grid.”
Osinbajo further said that the committee recommended 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.
The Committee also recommended the provision of ample support for the informal sector through low interest loans and by easing procedures for registration, licensing, and obtaining permits.
Other recommendations, according to him, are: lFacilitation of broadband connectivity across the country and creation of a wide variety of technology and ICT jobs.
lExpansion of the Social Investment Programme, through an increase in the number cash transfer beneficiaries, N-Power volunteers and sundry traders enjoying small and micro loans through the MarketMoni and TraderMoni schemes. The pre-existing conditional cash transfers will also be extended to cover a larger number of the extremely poor.
“The key to the success of this plan is undoubtedly ‘implementation’, making sure that we execute the Plan faithfully and working in collaboration. We have therefore recommended that each Minister will be responsible for supervising the implementation of plans situated in their respective ministries.
“Ministers will also be responsible for ensuring synergy between all relevant stakeholders across the public and private sectors. The Economic Sustainability Committee, which is Inter-Ministerial in nature, should only then remain to oversee plan implementation, 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.”
Committee consulted widely
According to Osinbajo, the Committee consulted and received memoranda from members of the Presidential Economic Advisory Council, the 36 state governors; and the leadership of the National Assembly.
He also said the Committee took into account existing government policies and strategies, including the Economic Recovery and Growth Plan, ERGP, report of the Economic Crisis Committee headed by the Minister of Finance, Budget & National Planning, the Finance Act 2019; the Central Bank of Nigeria, CBN proposals; and the National Economic Council Report on the COVID-19 Crisis.
Nigerians have done their best — Buhari
Receiving the report, President Buhari said the emergence of coronavirus threw the entire world into serious economic crisis, thus making things difficult.
He stated: “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.
READ ALSO: COVID-19: Economy’ll go into recession — FG
“Despite all these, Nigerians have done their best and persevered. I must salute Nigerians for their resilience in adapting to the realities of the covid-19 effect while also recognizing the super-human effort of our frontline health workers who continue to play a critical role in keeping our country and people safe.”
He said more efforts would be geared towards making life better for citizens.
He stated further: “Non-oil income largely made up of taxes are also dramatically reduced on account of the lockdown. It is clear that businesses face the prospect of collapse so we must prepare for difficult times, while the government continues to seek ways of supporting businesses and industry.
“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 for a truly competitive economy that can support our people and secure our future.”
Reps seek measures to avert recession
In a related development, the House of Representatives has passed 37 Bills for assent by President Buhari, as it called for drastic and creative measures to reform the unraveling economy of the country.
The Speaker, Femi Gbajabiamila, who disclosed this, yesterday, indicated that economy-related legislations were prioritized, adding that the Bills covered procurement, business, electricity and related economic matters.
“We have in our first year, passed 37 long-awaited and much-anticipated legislation, including reforms of the Federal Government’s public procurement system, the Company and Allied Matters Act and the Deep Offshore and Inland Basin Production Sharing Contracts Act. We have proposed and passed legislation to achieve electric power sector reform, establish a process of presidential transition that ensures continuity in government and limits the possibility of political or constitutional crisis arising from anticipated or sudden shifts of presidential power.”
He said among the pieces of legislation treated by the House, within the time, covered the disabled, industrialisation, job creation and communities in the country.
His words: “We heard the cries of those of our brothers and sister who being less able- bodied than others, have found their opportunities for advancement in education and professional prospects, curtailed and constrained. We passed, on their behalf, the Physically Challenged (Empowerment) Bill, 2019 to promote accessibility and ensure that the barriers that stand in the way of people achieving their dreams no longer exist.
We have delivered the Nigeria Industrial Revolution Plan Bill, and the Raw Materials Research and Development Council (Repeal and Re-Enactment) Bill, both of which will place our country on the path to industrial self-sufficiency and economic growth that lifts people out of poverty, creates jobs that pay a living wage and ensures that more of our people can contribute to the continued development of communities across the nation”.
He, however, bemoaned the fate of those affected by the COVID-19 and the dilapidation in the Health Sector.
‘COVID-19 exposed structural weaknesses of our system’
“When the deadly Coronavirus arrived on our shores, it exposed the structural weaknesses of our system. We did not foresee, nor were we prepared for the global devastation of the Covid-19 disease. We were not ready to fight an enemy of this nature, and our lack of preparation has caused a great deal of loss and despair across our nation.
We are still at risk of more severe damage to our economy and our national security. All of this is in addition to the existing threat of disease and loss of lives at a scale we will not long forget. I pray for the ill and recovering, and I commit the dearly departed to a peaceful afterlife and ask for God’s grace on those they have left behind”, he said.