By Bayo Bernard
It’s finally here. After much speculations, the Central Bank of Nigeria, CBN has announced that Nigeria faces imminent economic recession due to dwindling oil prices caused by the ravaging coronavirus pandemic.
The government bank has, therefore announced a total package of N1.1 trn as a temporary measure to stabilize the economy at this critical times.
The apex bank’s economic bailout came on the crest of yesterday’s warning by the Presidential Economic eAdvisory Council, PAC to Nigerians to brace up for an impending economic recession as a result of the corona virus emergency.
The Prof Doyin Salami-led council, met with the President Muhammadu Buhari at the State House, Abuja on Wednesday to brief him on the situation.
According to the CBN Governor, Godwin Emefiele, the package has become necessary due to sliding oil prices which has already taken a toll on the economy.
The breakdown of the N1.1tn indicates that close to N1tn would be used to support the local manufacturing sector as well as boost import substitution, Emefiele said in a statement on Wednesday.
He explained that the remaining N100 billion would be used to manage the corona virus emergency.
Funds will be released to health authorities to ensure laboratories, researchers and innovators work with global scientists to patent and produce vaccines and test kits in Nigeria, the CBN said.
The apex bank has also directed deposit money banks, DMBs in the country to rise up to the occasion by providing emergency funds to support the national emergency.
Commercial banks, it said should provide robust funds for health and pharmaceutical industries sectors at this times to safeguard the economy.
Emefiele said “First, the CBN is directing all Deposit Money Banks to increase their support to the pharmaceutical and healthcare industries.
In addition to the N50bn soft loans to small businesses already announced, the CBN will increase its intervention by another N100bn in loan this year to support the health authorities.
Secondly, given the continuing impact of the disease on global supply chains, the CBN will increase its intervention in boosting local manufacturing and import substitution by another N1tn across all critical sectors of the economy.”
Meanwhile, the Presidential Economic Advisory Council said the government should implement various belt tightening measures to cushion the effects of sliding oil prices on the economy.
These includes, cutting down the 2020 Budget to reflect the present realities in the international crude oil market as well as pumping more funds to the productive sectors of the economy.
The PEAC said Nigerians must be ready to work harder at these times to get the economy rolling.
Femi Adesina, Special Adviser to President Buhari on Media and Publicity said in a statement, that the council Noted “that many countries around the world may go into economic recession, the PEAC advocated hard work for Nigeria to keep its head above the waters.
Among others PEAC, Adesina stated recommended “a possible revision of the 2020 budget, with priority spending on healthcare, re-prioritisation of expenditure on infrastructure to focus on projects nearing completion with pro-poor effects, curtailing recurrent expenditure, mobilising the private sector to strengthen health sector infrastructure, and boosting of government revenue, the PEAC stressed that the projections may seem dire, but the worst may be avoided with hard work and scrupulous implementation of policies.
