COVID-19: FG to intervene with N2 trillion in Nigerian economy

With the growing impact of the COVID-19 pandemic on world economies, the Federal Government of Nigeria (FGN) has announced it will inject N2 trillion into the Nigeria economy.

Part of the intervention will involve financial support to the aviation industry to help airlines get back to operations as it is estimated that the sector looses N21 billion monthly due to the COVID-19 lockdown.

Mr Clem Agba, the Minister for State for Budget And National Planning, made this known during a webinar that held on Tuesday. He add that the Economic Sustainability Committee has laid out five broad policy objectives with which to deal with the challenges.

The Federal Government of Nigeria is looking at a combined effect of intervention funding from the Central Bank of Nigeria(CBN), the Banks of Industry and other multilateral agencies and grants amounting to N2 trillion as a holistic response to the COVID-19 impact on Nigeria.

The Minister of State says that a facility of $2.5 billion is expected from the World Bank of which about $1 billion will be given to states as loans. The loan is supposed to be concessionary loans. On an initial stage, Mr President has only approved N850 billion loan to be sourced from the domestic capital market.

There have been massive disruptions across sectors of the economy internationally. One of the sectors worst hit is the aviation sector due to the wide range of cancellations recorded within a short period world over.

Another source of the transmission of impact of the global pandemic is through the impact on fiscal capacity of countries due to the fall in commodity prices for resource-dependent countries like Nigeria. The Federal Government of Nigeria is already considering a supplementary budget owing to the fall in foreign revenue. Even after  adjusting the approved benchmark $57 per barrel to $30 per barrel, the Federal Government of Nigeria through the Ministry of Finance, Budget and National Planning is still considering further adjustments.

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