Following the warnings from the International Monetary Fund (IMF), the World Bank Group and others over the looming global recession induced by coronavirus, many countries are making elaborate plans for economic recovery from the impact of the pandemic. There is no doubt that COVID-19 has given them an opportunity to transform their economies. This is why the government should not dismiss the recent IMF warning that Nigeria’s economy could suffer its steepest recession since 1987.  With the economy contracting at 3.4 per cent this year and about 90 million Nigerians living below poverty line, there are fears of another wave of poverty spike for the country, if urgent steps are not taken to remedy the situation.

Interestingly, the Federal Government and the Central Bank of Nigeria (CBN) seem prepared to weather the impending storm. The government has set up an Economic Sustainability Committee, headed by Vice President Yemi Osinbajo and other policy experts, to come up with a strategy to stimulate the economy, prevent another wave of recession and create employment opportunities, among other intervention programmes.

Since the COVID-19 outbreak has presented an opportunity to transform the economy, the apex bank has, therefore, mapped out post-pandemic measures to rejig the economy.  The CBN governor, Godwin Emefiele, had in a paper entitled “Turning COVID-19 tragedy into an opportunity for a New Nigeria,” expressed the need for Nigeria to start looking inwards to guarantee food security, high quality and affordable healthcare and cutting-edge education for citizens. He also made case for Nigeria to build a well-diversified and inclusive economy.

Available statistics showed that as at June 2014, Nigeria spent about N1.3trillion on importation of rice, fish, wheat and sugar, groundnuts, all of which can be produced locally. Nigeria also imports about 600,000 metric tonnes of palm oil annually from Indonesia and Malaysia. Therefore, in a bid to revamp the economy, the CBN plans for the N15trillion take-off equity for Infrastructure Company Plc, which will focus on Nigeria and managed by an independent infrastructure fund manager. The fund will be utilised to support the Federal Government in building the transport infrastructure required to move agriculture products to processors, raw materials to factories and finished goods to markets. The fund will also be used to finance light manufacturing, affordable housing, renewable energy and cutting-edge research.

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Considering the unprecedented impact of COVID-19 on global economy and healthcare systems, this is the time financial institutions should offer strategies to stimulate economic growth. We urge the Federal Government’s economic sustainability committee and the CBN to work in concert to build a resilient economy. They should also carry along all sectors of the economy. We recall that the informal sector in Nigeria contributes about 60 per cent of the country’s Gross Domestic Product (GDP) and 80 per cent of employment. Everything must be done to ensure that the economy withstands external and domestic risks arising from the pandemic.

It has been estimated that COVID-19 pandemic would affect the livelihood of about 50 per cent of the 99.6 million Nigerian population who earn their income on a daily or weekly basis as a result of the shutdown of businesses and likely layoffs that will follow. This may lead to a sharp decline in consumer spending, especially with the population rising at four per cent annually as well as inflation spike and currency devaluation. To keep the economy afloat, both the fiscal and monetary authorities should regularly review policies to suit present realities. During the 2016 recession, about 222 small scale businesses closed shop, while 180,000 people lost their jobs. According to the latest World Bank report, to overcome the present COVID-19 challenges, Nigeria needs at least 45 million new jobs between now and the next 10 years to reduce poverty and boost inclusive growth.

Government should also consider tax breaks and concessions for investors by suspending all forms of taxes, including Value Added Tax (VAT), as well as those for health sector investors, agriculture and agro-processing, aviation and hospitality sectors for at least one year.  The tax relief should also be extended to the required time for filling of Annual Returns, including payment of due amounts to June 30, 2020. To revamp the economy, all measures must be designed to salvage investments in micro, small, medium and large enterprises. This will require the collaboration of all the stakeholders in the Nigerian project.