The Federal Government of Nigeria has said that about N1.8tn of its N2.3tn COVID-19 economic stimulus package would be funded by financial institutions.
Also, the government disclosed that around N288bn from the N500bn of the package funded via the 2021 budget has been released so far and added that it was presently in the process of releasing a second batch.
The Minister of State for Budget and National Planning, Clem Agba, revealed this during the National Steering Committee meeting of the Nigeria Open Government Partnership in Abuja.
While talking on measures adopted to prevent the economy from collapse due to the impact of the COVID-19 pandemic, Agba said the N2.3tn stimulus package had to be deployed.
He said: “And there are basically two sources of funding the N2.3tn. The first N500bn had to come from special accounts, which were embedded in the revised budget.
“And then the other N1.8tn, which has programmes that were set up to be financed through the financial institutions.
“And we had negotiated a five per cent interest rates with a one year moratorium just to ensure that we are able to grow agriculture, look after the MSMEs and support the aviation sector.”
The Minister disclosed that the Federal Government also made provisions for the states by stopping the repayment of loans they collected.
He said: “We also made some provisions for the states for their survival. Like you know, the states had some bailout funds that they got from borrowings.
“We had to stop the repayment, both the principal and the interest for a year. These are measures that had to be taken to get the economy going.”
Agba said the measures paid off as Nigeria recorded a positive GDP growth in the fourth quarter of 2020.
When he was asked to state how much of the N2.3tn stimulus package had been pumped into the economy, the minister replied: “For the N500bn which comes from the budget, we have released about N288bn to deal with those issues.
“Some of it revolves around infrastructure and they are not things you do in a day. It is when the work is completed that you make the balance payment.”
Also, the minister reacted to some of the reports he saw on Twitter, where a CSO said Nigeria got a donation of $5.62bn. He stressed that the report was not true.
He said: “Nigeria did not receive a donation of $5.6bn to take care of COVID-19.
“What indeed happened is that as a result of the shortfall in revenue due to COVID-19, where there were supply disruptions, the demand for oil fell, leading to a reduction in crude oil demand globally.”
He said this triggered a reduction in Nigeria’s oil production, as the capacity of producing about 2.5 million barrels daily was reduced to 1.4milliin barrels per day.
He said: “This seriously affected our revenues and so we needed to look for funds to ensure that we augment the budget in order to stimulate the economy.
“So it is not correct that Nigeria had a donation of $5.6bn. Rather we introduced a stimulus of N2.3tn into the economy because we knew that with COVID-19, the country was going to be shut down just like the entire world had been shut down.”
