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.
- 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- US$150 million to be withdrawn from the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
- 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
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
- 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.
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
Download Here - Ministerial
Press Statement on Fiscal Stimulus Measures in Response to the COVID-19
Pandemic & Oil Price Fiscal Shock
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