COVID-19 impact to plunge 11 million Nigerians into poverty by 2022 ― FG

Federal Government has hinted that more than 11 million Nigerians may fall into poverty by the end of 2022 as a result of the negative impact of the COVID-19 pandemic on the nation’s economy.

Minister of Finance, Budget and National Planning, Zainab Ahmed, who made this known on Tuesday on day two of the National COVID-19 Summit, which was organised to bring all stakeholders together to discuss the Theme: “Pushing Through the Last Mile to End the Pandemic and Build Back Better”.

The Minister who was represented by the Director-General of Budget Office, Ben Akabueze, explained that before the pandemic, about two million Nigerians were expected to fall into poverty by 2020 as population growth outpaced economic growth.

According to her, the outbreak of COVID-19 caused a recession that pushed an additional 6.6 million Nigerians into poverty in 2020, bringing the total newly poor to 8.6 million in the same year.

“This implies an increase in the total number of poor in Nigeria from about 90 million in 2020 to about 109 million in 2022”, she said.

Ahmed further listed vulnerable employment; receiving fewer remittances and being close to the poverty line as being responsible for the increase in poverty.

While speaking on the impact of COVID-19 on the country’s economy, she noted that Nigeria’s total trade, driven by the slumps in exports, contracted by N3:731.49 billion (10.32%) from N36,152.11 billion in 2019 to N32,420.71 billion in 2020. Export declined by N6,669.55 billion (43,75%) to N12,522.67 billion while imports galloped by N2,2938.15 billion (17.32%) to N19,898.03 billion in 2020.

This resulted in a significant trade deficit of N7,375.34 billion in the review period from a surplus of N2,232.36 billion in the 2019 fiscal year. The decline in exports across all segments.

She said the country’s outstanding debt rose by N5.51 trillion or 20.12% to N32.92 trillion as of December 2020 from N27.40 trillion in December 2019. Partly from new external borrowings comprising a $3.4 billion budget support facility from the IMF, and the IDA of $1.2 billion, among others largely induced by COVID.

She said domestic debt stock also increased by N1.83 trillion to N20.21 trillion. Total reporter public Debt/GDP as of 31st December 2020 rose 3.61 percentage points to 21.61% from 19% at end of 2019 however remained sustainable.

Ahmed also said Brent Crude Oil price fell to as low as $7.15 per barrel in April 2020 f on $67.91 per barrel at end of 2019 an 89.46% decline over the period. The price she said quickly rebounded to over $51 per barrel as at the end of the year.

The finance minister speaking in the federal government health sector financing said the budget for the sector has more than doubled in nominal terms over the past five years.

She said the budget increased by 123.6% from N305.06 billion in 2016 to N682.13 billion in 2021. Inclusive of about N82 billion transfers to NHIS made possible by key and strategic interventions.

“This was further increased by N137 billion or 20% to N820.2 billion in the 2022 proposed budget.”

Ahmed said “the COVID-19 pandemic has impacted negatively on global economic activities affecting both developed and developing countries alike.

“The impact was disproportionately higher for developing countries particularly for those with poor health systems and those with higher cross border activities.

“Economies with lower fiscal buffers and/or higher fiscal distress we’re also less capable of intervening and therefore also more heavily affected.
“Nations generally experienced both health and economic impacts, albeit in varying degrees.

“The nature of the pandemic also meant that the measures to curtail the health impact were reinforcing/aggravating the economic impacts on nations.

“The pandemic reaffirmed the need for adequate and appropriate funding for the health sector globally, but has equally made domestic resource mobilization in support of this goal critical; in this regard, we are contemplating earmarked taxes for the health sector.

“Very importantly the COVID-19 crisis has further reaffirmed the need to build fiscal buffers that is critical for the next pandemic that is certain to come in the future.

“The FGN is therefore coordinating efforts among all tiers of government to face the difficult task of restoring the nation to a more secure future by tackling both the health and economic impacts of the pandemics.

“However, as we rebuild, our yes are also on fiscal and overall macroeconomic stability/sustainability.”

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