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Nigerian economy going into recession, might contract by -8.9% – Finance Minister

Zainab Ahmed admitted that the crash in crude prices would negatively affect the country’s revenue and foreign exchange earnings.

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IMF, World bank loans, Over 56% of 2019 budget expenditure was released for capital projects , FG changes decision to sell stake of oil assets in JVs, Finance Bill: Nigeria exempts small businesses from Company Income Tax , Finance Bill is for the good of Nigerians – Finance Minister, Zainab Ahmed, Nigeria, five other West African countries reject ‘Eco’ as ECOWAS single currency, FG rejects calls for tax reduction, tax relief for donors to intervention funds, Nigerian economy going into recession, might contract by -8.9% - Finance Minister, Nigeria to spend $33.20 billion in 2021 up 17.2%, will spend 25% of budget on debt servicing - Finance Ministry

The Nigerian economy is expected to record negative growth as it slides into recession, due to the outbreak of the coronavirus pandemic and crash in oil prices.

This was disclosed by the Minister for Finance, Budget and National Planning, Zainab Ahmed, during a press briefing after the first virtual meeting of the National Economic Council (NEC), which was chaired by Vice President, Yemi Osinbajo.

The minister said that the ravaging coronavirus pandemic is not only affecting the country economically, but also affecting the health sector, as the resources to fight this appear inadequate.

She admitted that the crash in crude oil prices would negatively affect the country’s revenue and foreign exchange earnings.

(READ MORE: Industries with low exposure to COVID-19)

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This oil price crash and coronavirus pandemic outbreak has also affected the economic growth of the country and weakened the naira.

According to the Finance Minister, “Net oil and gas revenue input to the federation account in the first quarter of 2020 amounted to N940.91 billion. This represents a shortfall of N125.52 billion.

‘’But with the work that the Economic Sustainability Committee is doing bringing up a stimulus package, we believe that we can reduce the impact of that recession.”

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Going further,Zainab Ahmed said, “And if we apply all that have been proposed and we are able to implement it we might end up with a recession that is -0.4%. But in any case, we will go into recession but what we are trying to do is to make sure that it is shallow so that we will quickly come out of it come 2021’’ 

READ ALSO: External reserves to fall below $30 billion, more forex restrictions expected

READ MORE: Emefiele insists CBN will not sell forex for importation of items produced in Nigeria

According to news from Channels Television, Ahmed also disclosed that the economic growth in Nigeria could contract by as much as -8.94% in 2020 in the worst-case scenario. She also said that in the best-case scenario, it could be a contraction of -4.4%, if there was no stimulus and 0.59% contraction if there was a fiscal stimulus package.

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Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

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Coronavirus

FG warns Nigerians about on-going N3million COVID-19 grant scam

FG has warned Nigerians to beware of scammers using phishing links to defraud unsuspecting members of the public.

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IMF, World bank loans, Over 56% of 2019 budget expenditure was released for capital projects , FG changes decision to sell stake of oil assets in JVs, Finance Bill: Nigeria exempts small businesses from Company Income Tax , Finance Bill is for the good of Nigerians – Finance Minister, Zainab Ahmed, Nigeria, five other West African countries reject ‘Eco’ as ECOWAS single currency, FG rejects calls for tax reduction, tax relief for donors to intervention funds, Nigerian economy going into recession, might contract by -8.9% - Finance Minister, Nigeria to spend $33.20 billion in 2021 up 17.2%, will spend 25% of budget on debt servicing - Finance Ministry

The Federal Government has issued a warning to Nigerians about an ongoing N3million COVID-19 scam in circulation.

This was disclosed by the Federal Ministry of Finance, Budget and National Planning via its Twitter handle.

According to the government, the scam targets Nigerians looking to benefit from the Federal Government assistance to businesses affected by COVID-19.

In the tweet, it warned about some phishing links being shared on social media, requesting for applications for N3 Million FG Grants.

It tweeted, “The general public should note that these phishing links are generated by Scammers and intended to defraud unsuspecting Nigerians.

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“Government requests for applications are only via official channels & websites.

“It has come to our attention that a link is being shared via social media requesting for applications for a FG N3 Million grant.

“The general public should note that this is a SCAM. Any requests for applications are only via official channels & websites. Pls beware! #FinMinNigeria.

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What they are saying

Okebunmi Omolaja, has tasked the Federal Government to take its warning further from the social media to other publicity tools in order to spread the information across Nigeria.

He said, “The Ministry can help by carrying the awareness campaigns to States radio stations or federal officers in each States to meet the CDA Leaders of their traditional rulers palaces/govt schools premises.”

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Coronavirus

COVID-19: Our economy is too fragile to bear another round of lockdown – Buhari

President Buhari has called on Nigerians to do all they can to avert a second wave of COVID-19 in Nigeria.

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Q1 2020 National Debt report, Buhari finally speaks on NDDC probe, urges NA to act with a sense of urgency,National Human Rights Commission,Presidency bows to pressure, agrees to demand made by EndSARS protesters, Our economy is too fragile to bear another round of lockdown-Buhari

President Muhammadu Buhari said that the Nigerian economy is too fragile to go into another lockdown, as the second wave of coronavirus forces some European countries – Germany and France, to enter another phase of lockdown.

The President disclosed this in a social media statement on Thursday afternoon via his official Twitter handle.

Buhari said Nigeria will work hard to control its local spread, as the country can’t afford a lockdown.

Looking at the trends in other countries, we must do all we can to avert a second wave of COVID-19 in Nigeria. We must make sure that our cases, which have gone down, do not rise again. Our economy is too fragile to bear another round of lockdown,” President Buhari said.

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(READ MORE:#EndSARS: Hoodlums loot Yakubu Dogara’s house in Jos)

What you should know

According to a Bloomberg report, the rising cases of COVID-19 in Europe have led to another phase of lockdowns, with the Eurozone’s 2 biggest economies, Germany and France announcing new lockdowns restrictions.

“The measures we’ve taken have turned out to be insufficient to counter a wave that’s affecting all Europe,” said French President Emmanuel Macron

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In August, Nairametrics reported that President  Buhari approved the extension of the second phase of eased lockdown by another 4 weeks.

Nigeria’s Gross Domestic Product (GDP) in real terms declined by 6.10% (year-on-year) in Q2 2020, ending the 3-year trend of low but positive real growth rates recorded since the 2016/17 recession.

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Business News

FG to invest in the deployment of Mini-grid systems to power 5 million homes in 2021

The Minister said the government will invest in Mini-grid systems that will provide power for 5 million homes in 2021.

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Estates in Lekki increase electricity tariff to N105/kWh, Eko Electric, Ikeja and 5 others to face NERC sanction for non-compliance, CBN reveals framework for financing National Mass Metering Programme (NMMP)

In a bid to provide remote communities with clean and affordable energy, the Minister of Power, Engineer Sale Mamman has disclosed that the Government is set to invest heavily in the deployment of Mini-grid systems that will provide power for 5 million homes in 2021.

This disclosure was made by Engr. Sale Mamman in a statement released into the mainstream media via his official Twitter handle.

READ: Electricity: Nigeria now has an installed generation capacity of 13,000MW – Minister of Power

The Minister explained that it is virtually impossible for the National grid to cover every geographical point within Nigeria. He emphasized that this reality prompted the present administration to sort out alternatives, and as a result, the Government is set to invest heavily in the deployment of Mini-grid systems, which can easily get to the most remote communities and provide clean, and affordable energy in 2021.

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READ: Nigeria to fix irregular power supply in 40 years- Senate

What they are saying

The Minister, in his statement, said, “It is virtually impossible to have the National grid covering every geographical point within Nigeria, that is why the Government is investing heavily in the deployment of Mini-grid systems, which can easily get to the most remote communities and provide clean, affordable energy.

“In 2021, part of our priorities at the Ministry and two of its implementing agencies will be on providing these Mini-grid systems for communities and stand-alone home solar systems. We have a target of 5 million homes. Clean, affordable, and accessible energy for all.”

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(READ MORE:FG set to create at least 5 million jobs for youths in the power sector – Minister of Power)

What you should know

The Minister of Power, Engineer Sale Mamman, at the 2021 budget defense before the House of Representatives Committee on Power in Abuja, yesterday disclosed that Nigeria’s installed grid power generation capacity has grown from 8,000MW to 13,000MW under the leadership of President Muhammadu Buhari.

READ: UPDATED: FG appoints Eweluka as NBET MD, as finance, power ministers wrestle

The Minister also pointed out that the distribution system had the capacity to evacuate 5,500MW of power, which is a significant improvement from 4,500MW in 2015.

 

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