The Federal Executive Council FEC on Wednesday approved the immediate implementation of the, Nigeria Economic Sustainability Plan (NESP) or stimulus that has an estimated N2.3 trillion price tag that backers hope will lessen the coronavirus pandemic’s human and economic toll.
The plan, designed to offer relief to individuals, the health-care system and even an entire corporate sector ravaged by the outbreak, would try and avert a drastic decline in economic growth, with the aim of keeping economic contraction to minus 0.59%.
The government’s N2.3 trillion economic stimulus plan would:
• stimulate the economy by preventing business collapse and ensuring liquidity
• retain or create jobs using labour intensive methods in key areas like agriculture, facility maintenance, housing and direct labour interventions
• undertake growth enhancing and job creating infrastructural investments in roads, bridges, solar power, and communications technologies
• promote manufacturing and local production at all levels and advocate the use of Made in Nigeria goods and services, as a way of creating job opportunities, achieving self-sufficiency in critical sectors of the economy and curbing unnecessary demand for foreign exchange which might put pressure on the exchange rate
• extend protection to the very poor and other vulnerable groups – including women and persons living with disabilities – through pro-poor spending.
A number of key projects are also included in the plan. Some of the biggest are:
• a mass agricultural programme that is expected to bring between 20,000 and 100,000 hectares of new farmland under cultivation in every state
• an extensive public works and road construction programme
• a mass housing programme that is expected to deliver up to 300,000 homes annually
• the installation of solar home systems for up to 5 million households
• a strengthening of the social safety net.
Also proposed is support for micro, small and medium enterprises, an 80% reduction in the registration fees for food, drugs, cosmetics, medical devices, and chemicals by the National Agency for Food and Drug Administration and Control (NAFDAC) as well as a waiver of administrative charges for product license renewals.
The government also plans to set up a survival fund to give payroll support to small and medium-sized enterprises, and to promote the use of domestic gas as well as technology hubs.
Ministers whose portfolios these fall under will be responsible for supervising implementation of the plans.
Source of Funding
Given Nigeria’s limited fiscal space and the scale of economic challenge, the Federal Government has opted to obtain the resources for the stimulus from:
Special Accounts – N500bn
CBN structured lending – N1.11 trillion
External bilateral/multilateral sources – N334bn
Other funding sources – N302.9bn.
MoneyCentral has argued in a recent article that a stimulus package of up to N3.6 trillion could save 5 million lives.