The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, has said the recent exchange rate adjustment done by the Central Bank of Nigeria (CBN) is in line with the federal government’s drive towards exchange rate convergence.
Ahmed, at the digital dialogue organised by BusinessDay yesterday, also said the federal government’s social investments programme would now be done in such a way that sharing palliatives would be through recipients’ bank verification numbers (BVN) and telephone numbers.
She spoke on ‘Mapping Nigeria’s Response to COVID-19’ with other distinguished business leaders.
According to her, the government is working towards implementing the Stephen Oronsaye committee report that recommended the rationalisation and restructuring of some Ministries, Departments and Agencies (MDAs).
“We are on the journey to a single exchange rate. It is a process we made commitment to and we are going to get there,” she said about the move towards exchange rate convergence.
On Nigeria’s fiscal shape, she said: “Where we are today is that as a nation, we find ourselves just like everybody in the world in a global health crisis that has very quickly snowballed to become a global economic crisis. The effect on the world is far reaching, but also it is for Nigeria.
“The pandemic has helped us to take a very critical look at our health infrastructure and economic policies guiding our help. It also helped us to fast-track key economic reforms, which were difficult for us to do.
“Because of the decline in the crude oil price, it became easy for us to pull out fuel subsidy. We are also on the path of exiting fuel subsidy as soon as there is improvement in the health crisis and that is one main target we seek to achieve.
“We also have the opportunity to critically look at some of the key development projects that have been going on in the oil and gas sector and it gave us an opportunity to look at the cost of operations of the oil and gas sector in Nigeria which is reported as one of the highest in the world today. So it helped us to look at reforms that need to be implemented.”
She added that the federal government has also rationalised expenditure.
Ahmed said: “At the federal government level, we were able to review our budget, cutting out expenditure that could wait for a later period to enable us accommodate critical expenditure required especially for us to adequately respond to the pandemic.
“The president had directed that we must make sure that we concentrate on implementing a major priority and key projects of the government such as the development of rail, major roads, bridges and power.”
On the stimulus package targeted at stimulating economic activities, which the government unveiled recently, she said: “We also have just concluded and handed over an economic stimulus plan that has a suite of initiatives that are meant to create economic activities by creating jobs and also providing palliatives not only to the poor and vulnerable but also to the very small and weak businesses that are in the sectors that are heavily impacted by this pandemic.
“It is a N2.3 trillion stimulus plan and we hear of issues being raised that it is small for to size of the Nigerian economy but it is what we can do for 2020. And we need to do a plan that we are able to fund by government revenue as well as by raising funds from development partners and multilateral institutions.
“We have a suite of incentives we are working on. Some of them already captured in the Finance Bill of 2020, which provides relief to small businesses that are paying no income tax and the middle category have a reduced tax rate of 20 per cent.
“We are looking at how to provide tax relief for businesses that are not in the above bracket either by deferment of taxes or on a one-off basis to provide relief because we are trying to encourage businesses to keep jobs so that they don’t downsize to maintain production or stop production and productive activities to help to continue to drive economic activities.”
She said the pandemic provided lessons and opportunities to learn from.
“One thing I have learnt is that never waste a crisis and this is a crisis that is global and we are doing the best that we can. We are just taking it one at a time, ” she added.
According to her, the pandemic has provided an opportunity to enable the country to not only feed its citizens, but its neighbours.
In his contribution, a Professor of Economics and Public Policy at Blavatnik School of Government and Director of the International Growth Centre, Prof. Paul Collier, said Nigeria’s new normal means moving away from rent seeking into production.
“Production needs connectivity and power which has never been fixed. The government needs to fix these two things to have serious productivity.
“Nigeria needs to fix its food production. Nigeria imports so much food and this is a waste of foreign exchange. More than 40 per cent of farm produce rots in transit and investing in processing as well as connectivity can help increase food production and reduce the foreign exchange spent on food importation,” he stated.
On his part, the Chairman of FirstBank of Nigeria, Mrs. Ibukun Awosika, stressed the need for a partnership between the banks and the government in growing the economy.
She said there is need to “find the most efficient way to use the resources available to government using the resources of the banks as well to achieve the most that we have to reflate the economy and help businesses remain so we can preserve jobs and grow the economy and add value.”