See the March 2020 edition of our public policy brief

The COVID-19 pandemic, with almost 400,000 confirmed cases and over 16,000 deaths globally, coupled with plunging oil prices ($30 per barrel) have set Nigeria on the path to a second recession in four years. These twin problems threaten Nigeria's budget implementation, especially given that the prevailing oil price is just over half of the benchmark price of $57 per barrel. This has implications for strategic investment decisions as well as worsening capital flows and foreign reserves, with dire consequences for Nigeria's ability to meet external obligations, absorb shocks and prevent economic crisis. Unfortunately, the government has very limited fiscal buffers with which to augment the anticipated shortfalls from oil revenue, given that the Excess Crude Account (ECA) is practically empty. Government is already reacting with a rash of fiscal and monetary policy measures, including reduction of the 2020 budget by N1.5tn, N1tn intervention fund for critical sectors of the economy, N1.5tn private sector infrastructure fund to link farming communities to markets, N100bn health intervention fund, etc. click here to download

 

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