New fiscal measures to address the risks facing the Nigerian health sector and the economy due to the current global economic disruption caused by COVID-19 outbreak have been unveiled by the federal government.
Overall, the government said that it would source for N2.679 trillion ($7.05 billion) from the World bank, the International Monetary Fund (IMF), the African Development bank (AfDB) to contain coronavirus in Nigeria and provide palliatives to cushion the effect of the pandemic.
The amount, which is to be partly drawn from Nigeria’s savings with the IMF, is arrived at the current exchange rate of $1/480.
The minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, who spoke on the fiscal measures, stated that President Muhammadu Buhari had approved the establishment of a N500 billion COVID-19 Crisis Intervention Fund which the government will employ 774,000 Nigerians through public works programme.
The fund, according to Ahmed, would involve mopping-up cash resources from various special funds and accounts, in consultation with and approval of the National Assembly.
She explained that the fund would also be used to finance the federal government’s interventions to support states in improving healthcare facilities; finance the creation of a special public works programme, and fund any additional interventions of the government.
Ahmed further said the proposed intervention fund would be sourced from grants being expected and loans from international development partners as well as multilateral institutions
The minister said that the N2.679 trillion would be sourced from the World Bank, IMF, AfDB, and the Nigeria Sovereign Investment Authority (NSIA) Stabilisation Fund.
In details, the government seeks for a $2.5 billion loan from the World Bank and another $1 billion from the AfDB. If approved, $1.5billion of the World Bank loan will be for the federal governmentwhile the states will collect $1billion.
Ahmed said that the government had applied for the full withdrawal of its $3.4 billion contribution with the IMF. Apart from that, President Buhari, she said, had approved that the sum of $150 million be withdrawn from the NSIA Stabilisation Fund to support the June 2020 Federal Account Allocation Committee (FAAC) disbursement.
“Nigeria has a contribution of $3.4billion with the IMF and we are entitled to draw up to the whole amount. We have in the first instance applied for that maximum amount, then in the process when we negotiate, we might get the maximum amount or less but that is the amount of our contribution with the IMF. This will not be tied to any conditionalities. However, it is important to clarify that Nigeria does not intend to negotiate or enter into a formal programme with the IMF, at this time, or in the foreseeable future,” the minister said, adding that the draw down programme does not have conditions attached to it. “We have requested from the World Bank $2.5billion and $1billion from the AfDB.”
Zainab said the president has also directed the Ministry of Finance to engage with the CBN to agree on a debt and interest moratorium for states on federal government and CBN-funded loans, in order to create fiscal space for them, given the projected shortfalls in FAAC allocations.
The plan is that, once monthly average FAAC receipts fall below a specific threshold, interest and capital payments by the states shall be suspended till monthly average FAAC receipts exceed the threshold.
The finance minister added that the federal government is engaging the World Bank, the AfDB, the Islamic Development Bank and the IMF to access concessional funding to support the implementation of the 2020 budget.
Onthe special public works programme, she said: “Mr. President had previously approved a pilot special public works programme in eight states to be implemented by the National Directorate of Employment (NDE) from February 2020 to April 2020. Mr. President has now approved that this programme be extended to all 36 states and the FCT from October 2020 to December 2020.”
Under it, the government targets the creation of 1000 jobs in each of the 774 local government areas in the country.
Commenting on the enhanced financial support to the states for critical healthcare expenditures, Ahmed said: “The government has provided N102.5 billion in resources to be available for direct interventions in the healthcare sector. Of this sum, N6.5 billion has already been made available to the Nigeria Centre for Disease Control (NCDC) for critical expenditures. More funds are to be provided from the proposed crisis intervention fund to address emerging and priority funding needs as these arise.”
FG, UN Launch Covid -19 Basket Fund
Meanwhile, the United Nations (UN) and the federal government have launched a COVID-19 Basket Fund to harmonise investments in the National Pandemic Response Plan developed by the Presidential Task Force on COVID-19.
The basket fund will serve as the One COVID-19 Financing and Investment Platform for diverse stakeholders (UN and other multilaterals, bilaterals, private sector, foundations, philanthropists, among others) to channel their financial support to ensure an efficient, effective and impactful response to the coronavirus pandemic.
According to a statement released by the media office of the secretary to the government of the federation (SGF),the COVID-19 Basket Fund will be facilitated and implemented by the UN system in Nigeria, through a Project Management Board comprising representatives of the Presidential Task Force on COVID-19 Response, relevant government agencies, contributing donors and the UN system.