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N2.3trn Stimulus package approved for Nigerian economy

Federal Executive Council Meeting in Council Chambers, Abuja, FCT Photo: File

*Package is a strategy to tackle low exchange rate, youth unemployment, negative growth, says Finance Minister Zainab Ahmed

* Funds obtained from special accounts, bilateral and external sources

Isola Moses | ConsumerConnect

In response to the far-reaching disruptions and attendant challenges resulting of the novel Coronavirus (COVID-19) pandemic on Nigerians, businesses, and the entire economy, the Federal Executive Council (FEC) has approved a N2.3 trillion incentive package to support the nation’s economy.

ConsumerConnect reports that the FEC, presided over by President Muhammadu Buhari Wednesday, June 24 in Abuja, FCT, approved the stimulus package to further enhance economic activities in the country.

Mrs. Zainab Ahmed, Honourable Minister for Finance, Budget and National Planning, who disclosed this development to the State House correspondents after the Council meeting, stated that the package is part of the Nigeria Economic Sustainability Plan (NESP) recommended by the Vice-President Yemi Osinbajo-led Committee.

Ahmed explained that the goals of the NESP is to create jobs, invest money in the economy towards preventing the nation’s economy from sliding into recession, supporting small businesses, and prioritising local content (Made-in-Nigeria) initiative.

The NESP is a 12-month ‘Transit’ Plan between the Economic Recovery and Growth Plan (ERGP) and the ERGP-successor-plan currently being worked upon, the Minister said.

According to her, “the total package that we presented today (Wednesday) is in the sum of N2.3 trillion, N500 billion of this is a stimulus package that is already provided for in the amended 2020 Appropriations Act.

“These are funds that we have sourced from special accounts.

“We also have N1.2 trillion of these funds to be sourced as structured low-cost loans which are interventionary from the Central Bank of Nigeria as well as other development partners and institutions.

“We have N344 billion that will be sourced from bilateral and external sources and also additional funds that we can source locally.

Ahmed further disclosed that the strategy being adopted is to enable the government to respond to the triple problems of low exchange rate, youth unemployment as well as negative growth with which the country is currently contending.

“The plan has to also support small businesses that have suffered severe impact of COVID-19 as a result of lock down.

“Specially, the hotel (hospitality) industry, private schools, restaurants as well as the transport sector have been very well-impacted by this.

“We have also seen a significant impact on the poor and the vulnerable and even people that were okay as small traders, have been hard hit by standstill that we witnessed as a result of lockdowns,’’ she said.

She stressed that the FEC endorsed the adoption of direct labour intervention process in the execution of agricultural, housing and road construction projects to create jobs, using labour intensive methods.

“Council was able to take our reports and the interventions in the plan are that we prevent businesses from collapsing and also to infuse liquidity around the Nigerian economy, to create jobs using labour intensive methods such as agriculture, facility management, housing, construction, direct labour interventions that will create a lot of jobs very quickly.

“We have promoted in the plan manufacturing and local production at all levels, we are advocating for the use of made in Nigeria in all of these public works that we will be doing as a way of cresting jobs opportunities to enhance jobs sufficiency.

“So, we expect for road construction for instance, we expect the minister of works not buy bitumen but to consider the use of gemstones and cement or other materials that can be used here, that way we converse our resources and will also be able to ignite other sectors within the economy,’’ said the Minister for Finance, Budget and National Planning.

On housing, the minister revealed that 300,000 houses would be built by the Federal Ministry of Works and Housing, using standard designs that will be done by the ministry, using strictly low cost materials.

Mr. Babatunde Fashola, Honourable Minister for Works and Housing, also told the correspondents that his ministry presented memorandum for the award of seven road projects across the country at the cost of N122billion, as approved in the 2020 Appropriation.

Fashola stated: “There are seven roads in all. The roads were valued at a total sum of N122. 280 billion expected to generate employment for about 2, 564 people.”

The roads are the dualisation of Akure to Ado Ekiti Road connecting Ondo and Ekiti States at the sum of N23. 751 billion; construction of Ukana─Akpautong─Ikot Ntuen Road, in Akwa Ibom State, for N1. 538 billion; and construction of Iluke─Aiyetoro Kiri─Abugi─Eggan Road, in Kogi State, for N25.352 billion.

According to the Minister, others are the rehabilitation of Odo─Ona Elewe Idiayunre─Marou─Ogun State border road in Oyo state for N4. 6billion; construction of Tamawa─Gulu Road, in Kano State, phase three and Maigar-Guru section for N1. 5billion.

A sum of N59.7billion was approved for rehabilitation of Potiskum─Fika─Bajoga─Gombe road linking Yobe and Gombe States while N6.7billion would be expended on the construction of Kachako-Danbazzau Road, in Kano State.

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