Covid-19: FG Settles For N2.3tn Stimulus Package To Avert Recession

The Federal Government has settled for a N2.3tn fiscal stimulus package to revive the economy which has  been badly hit as a result of the negative impact of the Coronavirus pandemic.

The stimulus package is contained in the Economic Sustainability Plan of the Federal Government which was submitted to President Muhammadu Buhari by Vice President Yemi Osinbajo on Thursday.

The plan is aimed at mitigating the effects of a deep recession, while ensuring social stability and addressing long-standing economic vulnerabilities as envisaged in the Economic Recovery and Growth Plan. 

While a stimulus package is seen as a  good start considering the negative impact of the economic crisis on businesses and individuals, the government is of the view that merely spending without increasing 
production output would only increase inflation. 

The Economic Sustainability Plan which was obtained by THE WHISTLER  would last for one year focusing on achieving mass employment and mass domestic production that is  not dependent on importation or foreign exchange expenditure.

The Federal Government in the document said it was opting for the N2.3tn stimulus package because of the limited fiscal space and the scale of the country’seconomic challenge.

Explaining how the amount would be sourced, the document said that N500bn would come from Special Accounts; while N1.1tn would be injected into the economy through structured lending from the Central Bank of Nigeria.

In addition, the one year economic blueprint stated that about N334bn would be sourced from external bilateral/multilateral organisations while N302.9bn would come from other funding sources not stipulated in the document.

The document reads in part, “Fiscal and monetary measures will be taken to maximise government revenue and entrench a regime of prudence with an emphasis on achieving value for money. 

“Our goal is to keep the economy active through carefully calibrated regulatory interventions designed to boost domestic value-addi-tion, de-risk the enterprise environment, galvanise external investment and sources of funding while rationalising existing debt obligations and providing support to both the State Governments and business sectors negatively impacted by the Covid-19 pandemic.

“The role of government in the fiscal, monetary and real sectors is to be the provider or facilitator of resources for private sector programmes, and ultimately to ensure offtake of whatever is produced.”

The government in the document also stated that real sector measures would consist of a mix of project and policy approaches, that would focus on the creation of jobs across the fields of
agriculture, food security, housing construction, renewable energy, infrastructure, manufacturing and the digital economy. 

It said the aim of the measures would be to safeguard and support existing micro, small and medium scale businesses while ramping up local productive capacity.

This, it noted, would help to maximise emerging opportunities for innovation in technology, agro-allied value-chains, garment production, information and communication technology, entertainment and tourism, among other sectors.

The document explained that the
approaches chosen would help to reduce costs in a manner consistent with private sector development.

In the area of job creation, it said this would be implemented under four broad initiatives.

The first initiative is the adoption of a mass agricultural programme that would focus on smallholder farms to preserve existing livelihoods.

The document stated that the second approach to reducing unemployment would be implemented under a national rural road construction programme. 

It added that the third initiative would focus on a mass housing programme; while
the fourth aspect of the plan would focus on the large scale installation of mini-grids and solar home systems in a minimum of five million households not currently on the grid.

“Our ultimate aim is to transform adversity into advantage. Instead of the prospect of 30 million unemployed Nigerians staring us in the face, we can put up to 30 million Nigerians to work, even in the short term. 

“This possibility requires a concerted whole-of-government and whole-of-society campaign to steer our nation through 
these difficult times,” the document added.

The government expressed optimism that when fully implemented, the economic stimulus package would assist the country survive the negative impact of the pandemic on the economy.