The Federal Government of Nigeria has said that one of key government’s priorities has been to ensure that businesses not only remain operational but also are positioned to grow back better post COVID-19.
On how this is being facilitated, Mrs. Zainab S. Ahmed, the Honourable Minister of Finance, Budget, and National Planning, said that government is facilitating this through a suite of interventions aimed particularly at supporting micro, small and medium enterprises (MSMEs), and those sectors that are vulnerable.
In her keynote address on “Open for Business (Again): Enabling Trade and Investment Across Borders” at the Friends of Africa (FOA) Annual Economic Summit 2020: Re-igniting Global Trade: Road to Recovery, she said: “Our response to the COVID-19 pandemic under the leadership of President Muhammadu Buhari has been proactive, people-oriented, and aimed at averting drastic economic decline and protecting our most vulnerable citizens.”
On the fiscal side, several measures, according to her, have been implemented to protect our people, jobs, and the economy, including: Establishment of a N500 billion COVID-19 Crisis Intervention Fund to finance the upgrade and improvement of healthcare facilities, and the creation of a special public works programme to employ 774,000 people; significant tax relief for MSMEs, in part through ongoing implementation of the 2020 Finance Act; ongoing implementation of the strategic revenue growth initiatives (SRGI); and waivers on IDEC/VAT exemption on identified Medical supplies.
“To complement these fiscal interventions, the Central Bank of Nigeria (CBN) has introduced a suite of interventions including: The N50 billion Household and SME COVID -19 targeted credit facility of which N49 billion has been disbursed to small businesses and to over 80,000 households as of June 2020; and N100 billion credit support intervention for the health sector”, Ahmed said, adding that the bankers bank has proactively motivated banks and other financial institutions in the country to introduce different initiatives including waivers on payment of fees on credit cards, loan repayment holidays to name a few.
“In July 2020, CBN issued guidelines to access its non-oil export stimulation facility. This Fund was introduced with the intention of diversifying the revenue base of the economy, and to expedite the growth of the non-oil export sector. The facility is intended to augment dwindling export financing so as to reposition the sector for increased contribution to economic development.
“We amended the 2020-2022 Medium-Term Fiscal Framework (MTFF) and the 2020 Appropriation Act; introduced a fiscal stimulus package of N2.3 trillion (about USS5.9 billion), and are scaling up critical human capital interventions aimed at protecting our most poor and vulnerable”, she noted.
In her reference to Nigeria’s economic sustainability plan, the Honourable Minister further noted: “In June 2020, we launched a multi-sector economic sustainability plan (ESP) aimed at mitigating the impact of the pandemic on the overall economy and focused on creating jobs, stimulating the economy, supporting SMEs and averting a recession. The Plan is a short to medium term structured response to the COVID-19 pandemic and economic challenges. However, more comprehensive structural reforms will be fully articulated in the Medium-Term National Development Plans (MTNDP 2020 -2025 and MTNDP 2026-2030) and the long-term national development plan i.e. ‘Nigeria Agenda 2050’.
Further, in July 2020, CBN, according to her, issued guidelines to access its Non-oil Export Stimulation Facility. “This Fund was introduced with the intention of diversifying the revenue base of the economy, and to expedite the growth of the non-oil export sector. The facility is intended to augment dwindling export financing so as to reposition the sector for increased contribution to economic development.
With the accession by various African economies, over the course of 2019, to the Africa Continental Free Trade Agreement (AfCFTA), Ahmed cautioned that there is need to be mindful of the impact that COVID-19 will have on global trade and commerce in the medium-to-long term as free movement of goods, people and services will occur.
“It is for this reason, that I recently constituted the Fiscal Policy Reform Committee (FPRC) to ensure that the Finance Act for 2021 strikes a balance between broader macroeconomic strategies to attract investment, grow the economy, create jobs as well as the immediate fiscal strategies for accelerated domestic revenue mobilisation, in response to the COVID-19 Pandemic and the recent domestic/ global economic downturn.
If the pandemic persists beyond 2020, in her opinion, it will fundamentally change how global, regional and domestic commerce is transacted going forward. Hence, more focus must be placed on investing in information and communication technology (ICT) infrastructure; science, technology, engineering, the arts and mathematics (STEAM) education; mobile money and financial inclusion; high tech manufacturing and integration into global chains, etc.
Apart from shedding some light on the Presidential Enabling Business Environment Council (PEBEC), which is currently engaging members of the drafting an Omnibus Bill on business facilitation, Ahmed also stated that the Ease of Doing Business plays a crucial role in the economic growth of any country. Therefore, the August 2020 passage of the amendment of the Companies and Allied Matters Act (CAMA), would lead to significant reform of the business environment in the country.