COVID-19: Federal Government of Nigeria Announces Fiscal Stimulus Measures

Proshare

Tuesday, April 07, 2020  01:37 AM / PwC Nigeria/ Header Image Credit:  @FinMinNigeria

 

Nigeria's Minister of Finance, Budget and National Planning has announced fiscal stimulus and other interventions in response to Covid-19 pandemic and the oil price fiscal shock. Below are the highlights:

 

COVID-19 Crisis Intervention Fund

  • Establishment of a N500 billion COVID-19 Crisis Intervention Fund to upgrade healthcare facilities and fund Special Public Works Programme to generate employment.
  • Adequate framework will be put in place for the collection, management and reporting of donations into the Fund.
  • COVID-19 Donor Accounts, which will form part of the existing TSA arrangement will be opened with Zenith Bank, Access Bank, Guaranty Trust Bank, UBA and First Bank.

Proshare Nigeria Pvt. Ltd.

Subnational support

  • Draw down on World Bank facility (US$82 million) and additional financing from the REDISSE (US$100 million) project to meet COVID-19 emergency needs by States and the FCT.
  • FG's 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 NCDC for critical expenditure and Lagos State has already been provided N10 billion in emergency funding
  • US$150 million to be withdrawn from the Nigeria Sovereign Investment Authority ('NSIA') Stabilization Fund to support the June 2020 FAAC disbursement.
  • Federal Ministry of Finance, Budget and National Planning will 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 the States.


Budget revision and funding

  • Revision of the benchmark oil price for 2020 to US$30/barrel and oil production to 1.7mbpd.
  • Concessional funding from World Bank, ADB and the Islamic Development Bank for the 2020 Budget.
  • Also funding from IMF's COVID-19 Rapid Credit Facility. Nigeria does not intend to negotiate or enter into a formal programme with the IMF
  • Downwards adjustment of non-oil Revenue projections including various tax and customs receipts, as well as proceeds of privatisation exercises
  • The Budget Office is currently working on a revised 2020 - 2022 Medium Term Expenditure Framework / Fiscal Strategy Paper as well as an Amendment to the 2020 Appropriation Act.
  • The amended Budget will provide for the COVID-19 Crisis Intervention Fund

Proshare Nigeria Pvt. Ltd.


Tax reliefs and allowances

  • 2019 Finance Act already grants tax exemptions to small businesses while the tax rate for medium-sized companies has been reduced from 30% to 20%
  • VAT exemption for basic food has been expanded while medical and pharmaceutical products are also exempted from VAT
  • Government to issue circulars and Ministerial Orders for charitable donations in support of COVID-19 Pandemic to be tax deductible
  • Activate steps to release and (where necessary) enhance the hazard allowances provided in the remuneration structure of the Federal health sector workers. The Federal Government enjoins the affected States to take similar measures.

Overall, there will be better coordination of Ministries of Finance, Budget and National Planning; Industry, Trade and Investment; Petroleum Resources; Health; as well as the CBN, to pursue greater coherence and coordination of Nigeria's fiscal, monetary as well as trade policies, during the difficult days and months ahead. The Economic Sustainability Committee chaired by the Vice President will lead these efforts.

 

Download Here - Ministerial Press Statement on Fiscal Stimulus Measures in Response to the COVID-19 Pandemic & Oil Price Fiscal Shock

 

Related News - Fiscal Policy

1.      Fiscal and Monetary Responses to COVID-19 Menace: Racing Against Time

2.     FG Launches Financial Transparency Policy Portal

3.     Treasury Single Account - The Puerto Rican Government Earned $49m in Interest Fiscal YTD

4.     Friedrich Hayek and The Price System: The Future Of Classical Liberalism and The Free Market

5.     Economic and Institutional Restructuring for the Next Nigeria - Soludo

6.     How Government Policy Affects Business , Society In National Development and Changing Environment

7.     Nigeria's Fiscal Quandary: A Revenue Problem Or A Debt Problem?

8.     Irrespective of Who Wins 2019 Elections, ERGP Should Be Sustained - Toyin Sanni

9.     2019-2021 MTEF and Fiscal Strategy - First Fiscal Projections Through to 2021

10.  Government Role In The Economy - Differentiating Policies And What Elections2019 Comes Down To


 Proshare Nigeria Pvt. Ltd.


Related News - Monetary Policy

1.      MPC - Think Twice or You Sink! FDC Aligns With TheAnalyst Opinion that the CBN is Trapped

2.     CBN Issues Guidelines for the Implementation of the N50bn Targeted Credit Facility

3.     CBN Communique No. 129 of the MPC Meeting - Mar 23-24, 2020

4.     The Limits of Heteredox Economics Revealed, MPC Trapped and Has to Hold

5.     Monetary Policy Preview - Caught Between the Devil and the Deep Blue Sea

6.     Fiscal or Monetary, Both, Neither?

7.     COVID-19: CBN, Bankers' Committee To Support Pharmaceutical Coys

8.     Bankers Committee Reviews Impact of COVID-19 On Economy, Announces Support Packages

9.     Coronanomics: Figuring Out CBN's Recent Policy Intervention

10.  CBN Policy Measures In Response to COVID-19 Outbreak and Spillovers

11.   Bank of England Measures to Respond to The Economic Shock from COVID-19

 

Proshare Nigeria Pvt. Ltd.


Related News - Budgets and Plans

1.      Supplementary Budget - Is Nigeria Ready for the Pain?

2.     Back to Work on the 2020 Budget

3.     Coronavirus: FG to Review Budget as Oil Price Plunges

4.     A More Grounded Budget For 2020

5.     Budget: FG Completes Just 31.7% of Constituency Projects

6.     President Buhari Signs 2020 Appropriation Bill Into Law

7.     Full Speech of Ogun State Governor, Dapo Abiodun At 2020 Budget Presentation

8.     2020 Budget: An End To Nigeria's Budget Cycle Conundrum?

9.     Fiscal Prudence: Federal Government Approves Token Cost Saving Measures

10.  2020 Budget Proposal: Key Takeaways

11.   President Buhari's 2020 Budget Speech

 

Proshare Nigeria Pvt. Ltd.


Related News - Nigerian Economy

1.      Nigeria's Total Public Debt Stood At N27.40trn in Q4 2019 - NBS

2.     High Debt Service, Low Revenue Collection

3.     FAAC Disburses N647.35bn in February 2020 - NBS

4.     PMI Reading No 84: Fall on Global Headwinds

5.     Debit on the Services Account Exceeds $10bn in Q4 2019

6.     Modest Rise in the FGN's Domestic Debt; Debt Stock At N14.27trn As At December 2019

7.     Nigeria's Current Account Deficit Widened from -2.2% to -5.4% in Q4 2019

8.     COVID-19: Presidency Debunks Payment of N30,000 Relief Package to Nigerians With Verified BVN

9.     The Nigerian Economic Stimulus Bill 2020 - How Much Cash Would Your Business Get?

10.  The Nigeria Emergency Stimulus Bill Passes Second Reading at House of Reps - For The Records



    Proshare Nigeria Pvt. Ltd.

     

    Proshare Nigeria Pvt. Ltd.

    READ MORE:
    Related News
    SCROLL TO TOP