The Federal Government has said that before the COVID-19 pandemic runs out millions of Nigerians will go into extreme poverty, while the Gross Domestic Product, GDP, might likely fall between -4.40 percent and -8.91 percent, depending on how long the crises lasts and the strength of the economic response.
The Federal Government also said Nigeria is recording an average of N185 billion revenue shortfall monthly as a result of the pandemic.
It disclosed that the economic impact of the COVID-19 pandemic had 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 proactive could be done to arrest the situation.
These, among others, were contained in the report of the Economic Sustainability Plan Committee, entitled “Bouncing Back: The Nigerian Economic Sustainability Plan”, headed by Vice-President Yemi Osinbajo, which was submitted to President Muhammadu Buhari at the Council Chamber, Presidential Villa, Abuja.
Vanguard, last Monday, exclusively reported that Nigeria’s misery index is set for a spike, with more than three million people joining the population of the poor, against the backdrop of the projected contraction of the economy as measured by the Gross Domestic Product, GDP, and the population growth rate.
The government had projected that the economy (GDP) will contract by 4.4 percent by end of 2020, down from growth of 2.27 percent in 2019, due mainly, to fallouts of the economic impact of COVID-19.
On the other hand, the population is set to grow by 3.5 percent, reaching about 218.3 million at year-end, though some analysts told Vanguard this is a conservative estimate.
N3.1 trillion loss
The 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, about eight percent drop from 2019 figure of N337,550.
Consequently, the declines would precipitate an increase in the nation’s poverty index with the number of citizens below the 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 percent poverty rate for the country.
On the backdrop of the outbreak of COVID-19 and its impact on the Nigerian economy, President Muhammadu Buhari had set up the Economic Sustainability Plan Committee with the directive to come up with a plan that would provide succour to Nigerians.
Presenting the committee’s report, Osinbajo 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.
He stated: “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 the 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.”
Source: Vanguard
