Vice-President Yemi Osinbajo Presents Report of Economic Sustainability Plan Committee titled: “Bouncing Back: The Nigerian Economic Sustainability Plan” to President Buhari in Abuja, FCT

COVID-19: Government says millions more Nigerians drifting into poverty

* 39.4 million people will be out of unemployment by end of 2020 unless…. ─Report

*Declining GDP growth may result in N3.1 trillion loss to consumer purchasing power

* Federal Government outlines strategic measures as a way out

Isola Moses | ConsumerConnect

As the damaging effects of the socio-economic disruptions occasioned by the outbreak of the novel Coronavirus (COVID-19) become more visible in the nation’s economy, the Federal Government has said that before the fatal pandemic runs out its full course, millions more Nigerians would be under extreme poverty.

Nigeria’s Gross Domestic Product (GDP) might likely fall between -4.40 percent and -8.91 percent, depending on how long the virus crisis will last and the strength of the economic response, reports Vanguard.

According to the Federal Government, the country currently, is recording an average of N185 billion revenue shortfall monthly as a result of the Coronavirus (COVID-19) pandemic.

The elderly poor and vulnerable population queuing for some relief materials to survive the trying times in the economy.  Photo: PulseNg  

The economic impact of the COVID-19 pandemic has caused an astronomic rise in unemployment to 33.6 percent, indicating that about 39.4 million people would be unemployed by the end of 2020, if nothing concrete is done to address the situation.

In the recent report of the Economic Sustainability Plan Committee titled: “Bouncing Back: The Nigerian Economic Sustainability Plan”, headed by Vice-President Yemi Osinbajo, and submitted to President Muhammadu Buhari in the Federal Executive Council (FEC) Chamber, Presidential Villa, Abuja.

Recently, report indicated that Nigeria’s misery index is set for a spike, with more than three million people joining the ranks of the poor against the backdrop of the projected contraction of the economy as measured by the GDP and population growth rate.

The Nigerian Government had projected that the economy (GDP) would contract by 4.4 percent by end of 2020, down from growth of 2.27 percent in 2019, as a result of the economic impact of COVID-19.

The nation’s population, on the contrary, is as well projected to grow by 3.5 percent, reaching about 218.3 million at year end, though some analysts told Vanguard this is a conservative estimate.

It was also gathered that decline in GDP growth rate is set to result in loss of about N3.1 trillion to the population’s purchasing power which will equally bring down the per capita GDP to about N312,697 which is about eight percent drop from the 2019 figure of N337,550.

As the poverty rate increases in the economy, what hope for these kids looking into the future?  Photo: Naija247News

Consequently, the declines would precipitate increase in the nation’s poverty index with the number of citizens below poverty line growing to 89.5 million by year end from 86.71 million last year, based on the Nigeria Bureau of Statistics (NBS), 40.1 per cent poverty rate for the country.

Sequel to the outbreak of COVID-19 pandemic and its wide-ranging impacts on the Nigerian economy, President Buhari had set up the Economic Sustainability Plan Committee with the directive to come up with a plan that would provide relief to Nigerians.

Vice-President Osinbajo, while presenting the report, said measures put in place to curb spread of virus have had severe negative impact on firms and factories, as well as on trade, transport and tourism.

“Several projections, including those done by the NBS (National Bureau of Statistics) on behalf of the Economic Sustainability Committee showed a severe downturn in our oil earnings, as a result of which, even with oil price at 30 Dollars a barrel, we would still have a shortfall of about N185 billion every month, in the amount available for allocation to the three tiers of government.

“That unemployment may rise to 33.6% or about 39.4 million people by end of 2020, if we fail to take prompt pre-emptive measures; that millions more will fall into extreme poverty, before the pandemic ends; that GDP may fall to between minus 4.40% and minus 8.91%, depending on the length of the lockdown period and strength of our economic response,” said Osinbajo.

Going forward

Osinbajo has said that the Committee took a holistic view of the situation and the reality on the ground by deciding on a strategy hinged on President Buhari’s mantra to “produce what we eat and consume what we produce.”

He stated that “to create millions of new jobs, we need to focus on encouraging local production, local services, local innovation, and emphasise the use of local materials. “Nigeria and Nigerians can produce our food, build our houses and construct our roads, using local materials in all cases.”

According to the Vice-President, “if we must import, it must be to support local production. We have, therefore, recommended that we must carry out mass programmes that create jobs and utilise local materials.

“Such will include Mass Agricultural Programme, which is expected to bring between 20,000 and 100,000 hectares of new farmland under cultivation in every state of the Federation and create millions of direct and indirect job opportunities.

“Extensive Public Works and Road Construction Programme focusing on both major and rural roads and using locally available materials like limestone, cement and granite. “Mass Housing Programme to deliver up to 300,000 homes annually, engaging young professionals and artisans who form themselves into small and medium scale businesses within the construction industry, using indigenous labour and materials.

“Installation of Solar Home System, targeting 5 million households, serving about 25 million individual Nigerians who are currently not connected to the National Grid.” Osinbajo further said that the committee recommended support for local production and manufacturing of all that is possible, including tech apps, software, shoes, garments, steel fabrication, ceramics and furniture, with the required capital and essential machinery.

The Committee also recommended the provision of ample support for the informal sector through low interest loans and by easing procedures for registration, licensing, and obtaining permits, as well as facilitation of broadband connectivity across the country and creation of a wide variety of technology and ICT jobs, among others.

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