Business News
COVID-19: Short-term reforms needed to reduce impacts on the Nigerian economy -NESG
The Nigerian Economic Summit Group said the Government needs to develop some short-term reforms and take actions to reduce the impact of the Coronavirus pandemic on the Nigerian economy.
The Nigerian economy has remained very weak and since exiting recession in 2017. The growth rate has only been around 2%. In the same vein, the country’s external reserves have declined from about $45 billion in August 2019 to about $34.5 billion as of April 7, 2020, due to the crash in crude oil prices.
Nigeria’s over-dependence on oil for its revenue and foreign exchange earnings continues to weaken the fiscal capacity, just as the high rate of unemployment, infrastructure deficit, poor power supply, among problems have increased vulnerability to external shock.
The outbreak of the Coronavirus pandemic has led to disruptions to the global economy and people’s lives, with adverse effects in the oil market, tourism, investments, supply chains, capital markets, funding of the 2020 budget and so on. These highlighted conditions and others negatively affect Nigeria’s macroeconomic stability and resilience to external shock.
(READ MORE: COVID-19: What businesses must do to mitigate crisis)
In order to develop some strong resilience against these external shocks, the country needs to develop some short term reforms and actions to reduce the impacts of the Coronavirus pandemic on the Nigerian economy. In a report published by the Nigerian Economic Summit Group (NESG), as seen by Nairametrics, some of the needed short-term reforms were highlighted. See below:
- Restructuring Nigeria’s debt basket to allow for more domestic borrowing: Here, the government needs to increase the domestic debt limit because this is key to the country’s ability to secure external debts. This will ensure that there is enough funding to stimulate economic activities and growth through stimulus spending by the government.
- Review of 2020 budget to reflect current realities in terms of revenue and implement broader budget reforms: This calls for the urgent need to review the 2020 budget to reflect current realities. All non-productive spending should be dropped for projects with high impact on productive sectors and economy. In addition, the procurement process needs to be reformed so as to allow for timely execution of capital projects and judicious use of public funds. Note that the government has already taken steps in this regard, as earlier reported by Nairametrics.
READ ALSO: CBN, Bankers committee back N3.5 trillion stimulus package for Nigeria
- The Government should stop the determination of fuel price: The Government should reconsider its role in the petroleum downstream sector, especially with price regulation. The best option now is to stop fuel price determination/control and let market forces dictate the price. This will ensure the limited available resources are judiciously used for infrastructural development rather than supporting consumption through subsidy.
- Monetary Policy Consolidation: The government needs to make some critical monetary reforms such as moving away from multiple exchange rates, among others. Also, there is the need to create an instrument for maturing Open Market Operation (OMO) securities in order to get into the buy-in by investors. This will help mop-up liquidity in the system and reduce inflationary pressure. Most importantly, the government must work on strengthening the Central Bank of Nigeria (CBN)’s balance sheet, which will provide some support to the financial system and ensure its stability.
- Work on attracting FDI: The Government should also work on consolidating all policies that affect trade, economic activities, and investments. The current business and investment environments are hostile to both foreign and local investors. The provisions of the Finance Act 2020 show examples of the kind of activities required. For example, there was about $58.4 billion worth of foreign direct investments (FDI) that were delayed in 2019 due to unclear regulations in the country. In the same view, there is an urgent need to stop total reliance on the government for infrastructural funding. A more private sector-driven approach should be considered. A framework for Public-Private Partnership should also be strengthened.
READ ALSO: Impact of COVID-19 on startups
- Stop ad-hoc policymaking and engage stakeholders: The policymaking approach must be properly coordinated and consistent with existing plans. Engagement with relevant stakeholders before critical decisions are made should be practised across board. Also, relevant government Ministries, Departments, and Agencies(MDA) must conduct a cost-benefit analysis in the process. Not only does this send the proper signal to investors, but it also provides concrete evidence to support or challenge a course of action.
- Urgently revisit the closure of the land borders: The NESG urged the government to work with regional neighbours towards resolving the issues concerning the reopening of land borders as the adverse effects of border closure on trade and employment are increasing.
Coronavirus
COVID-19 Update in Nigeria
On the 6th of March 2021, 195 new confirmed cases and 10 deaths were recorded in Nigeria
The spread of novel Corona Virus Disease (COVID-19) in Nigeria continues to record significant increases as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 158,237 confirmed cases.
On the 6th of March 2021, 195 new confirmed cases and 10 deaths were recorded in Nigeria.
To date, 158,237 cases have been confirmed, 137,645 cases have been discharged and 1,964 deaths have been recorded in 36 states and the Federal Capital Territory.
A total of 1.54 million tests have been carried out as of March 6th, 2021 compared to 1.49 million tests a day earlier.
COVID-19 Case Updates- 6th March 2021,
- Total Number of Cases – 158,237
- Total Number Discharged – 137,645
- Total Deaths – 1,964
- Total Tests Carried out – 1,544,008
According to the NCDC, the 195 new cases are reported from 17 states- Lagos (70), Kaduna (22), Abia (20), Edo (18), Kano (10), Akwa Ibom (9) Rivers (7), FCT (7) Borno (6) Bauchi (5), Osun (5), Oyo (5), Plateau (3), Ekiti (3), Niger (2), Ogun (2) and Zamfara (1).
Meanwhile, the latest numbers bring Lagos state total confirmed cases to 56,374, followed by Abuja (19,328), Plateau (8,939), Kaduna (8,623), Oyo (6,761), Rivers (6,651), Edo (4,645), Ogun (4,419), Kano (3,830), Ondo (3,066), Kwara (2,953), Delta (2,582), Osun (2,449), Nasarawa (2,248), Enugu (2,078), Katsina (2,060), Gombe (2,010), Ebonyi (1,951), Anambra (1,811), Akwa Ibom (1,588), and Abia (1,568).
Imo State has recorded 1,551 cases, Borno (1,297), Bauchi (1,232), Benue (1,188), Adamawa (942), Niger (917), Taraba (863), Ekiti (825), Bayelsa (779), Sokoto (769), Jigawa (496), Kebbi (401), Cross River (334), Yobe (288), Zamfara (221), while Kogi state has recorded 5 cases only.
READ ALSO: COVID-19: Western diplomats warn of disease explosion, poor handling by government
Lock Down and Curfew
In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.
The movement restriction, which was extended by another two weeks period, has been partially put on hold with some businesses commencing operations from May 4. On April 27th, 2020, Nigeria’s President, Muhammadu Buhari declared an overnight curfew from 8 pm to 6 am across the country, as part of new measures to contain the spread of the COVID-19. This comes along with the phased and gradual easing of lockdown measures in FCT, Lagos, and Ogun States, which took effect from Saturday, 2nd May 2020, at 9 am.
On Monday, 29th June 2020 the federal government extended the second phase of the eased lockdown by 4 weeks and approved interstate movement outside curfew hours with effect from July 1, 2020. Also, on Monday 27th July 2020, the federal government extended the second phase of eased lockdown by an additional one week.
On Thursday, 6th August 2020 the federal government through the secretary to the Government of the Federation (SGF) and Chairman of the Presidential Task Force (PTF) on COVID-19 announced the extension of the second phase of eased lockdown by another four (4) weeks.
Governor Babajide Sanwo-Olu of Lagos State announced the closed down of the Eti-Osa Isolation Centre, with effect from Friday, 31st July 2020. He also mentioned that the Agidingbi Isolation Centre would also be closed and the patients relocated to a large capacity centre.
Due to the increased number of covid-19 cases in Nigeria, the Nigerian government ordered the reopening of Isolation and treatment centres in the country on Thursday, 10th December 2020.
On 26th January 2021, the Federal Government announced the extension of the guidelines of phase 3 of the eased lockdown by one month following the rising cases of the coronavirus disease in the country and the expiration of phase 3 of the eased lockdown.
On 28th February 2021, the federal government confirmed that the first tranche of Covid-19 vaccines will arrive in Nigeria on Tuesday, March 2nd, 2021.
READ ALSO: Bill Gates says Trump’s WHO funding suspension is dangerous
Manufacturing
CBN tasks multinationals on domestic production as P&G signs $35m deal to produce Oral-B locally
The CBN Governor has called on multinationals operating in the country to work towards the production of their goods in Nigeria.
