As the federal government is poised to inject N2.3 trillion into the economy to assuage the effects of COVID-19, prominent economists have expressed cautious optimism about the impact the package will have.
In a telephone conversation with NATIONAL ECONOMY last night, Dr. Uchechukwu Kelikume of Lagos Business School said given the current structure, the agriculture sector is contributing about 25 percent to Nigeria’s gross domestic product, but growing at a rate of only 3 percent. He said investing in the agric sector would impact the economy most at this time, but caveated that most investors would direct their attention to telecommunications and trade because of the dearth of infrastructure to support the agric industry in Nigeria.
Kelikume lamented the fact that the country does not have adequate storage facilities and transportation infrastructure for agricultural products, a factor that discourages investment into the sector, which stalls growth.
Currently, the agric sector employs approximately 36 percent of Nigerians, but growing at 3 percent. He said government needs to invest in that sector and let the private sector drive it.
The Director General of Lagos Chamber of Commerce and Industry, Dr. Muda Yusuf, also in a telephone conversation with NATIONAL ECONOMY said the way the N2.3 trillion stimulus package will be spent is already outlined in the Economic Sustainability Plan that supports small scale businesses, the aviation industry, the hospitality industry as well as provision for public works and housing. According to him, he’s in agreement with the way the package has been outlined, expressing optimism it will positively impact the economy.
Associate professor of the Department of Public and Private Law, Babcock University, Dr. Tayo Bello also told NATIONALECONOMY in a telephone conversation that the full gamut of economic sectors in the country needs stimulus package. He however stressed that road infrastructure is a very critical area that needs attention because, according to him, transportation oils the economy, and it is good roads that make for smooth transportation.
Bello expressed concern that N50 billion earmarked to employ 774,000 youth for three months should instead be channeled in improving road infrastructure in addition to the N2.3 trillion package, a move he said will impact the livelihoods of young Nigerians.
He also stressed that high priority needs to be given to health and education, adding that if the stimulus packaged is put to prudent use, it will benefit all Nigerians.
Meanwhile, Minister of Mines and Steel Development, Mr. Olamilekan Adegbite, said yesterday that the Federal Government’s proposed N2.3 trillion will boost the mining and other sectors of the economy in post COVID-19 rescue operations.
Adegbite said this in an interactive session with newsmen on Federal Government’s post COVID-19 plans for the solid mineral sector, on Monday in Abuja.
He said the ministry would get six billion naira from the total sum at the end of the day.
According to him, the ministry had lofty plans before the COVID-19 pandemic, which he has adversely affected the solid mineral sector considering its operations.
Adegbite said the development was not peculiar to the solid mineral sector as other sectors of the economy were equally affected by the pandemic.
“The pandemic, for instance, has limited our ability to go forward on the Ajaokuta Steel project; we are four to five months behind schedule according to government’s plans to resuscitate the complex,” he said.
This, he said, was specifically so because Russian experts who were supposed to come for the technical audit of the complex could not come because of the pandemic and the ban on flight operations.
He added that the idea was for the experts to come into the country and be hosted for 12 weeks within which they were expected to do a proper audit of the Ajaokuta Steel Complex.
He said this had been put on hold until the lockdown occasioned by the COVID-19 pandemic and the ban on air travel was lifted.
“When this is lifted and we think it is safe enough, these experts will come into the country and we will continue where we stopped.
He added that the Ajaokuta Project Presidential Implementation Team (APPIT) was, however, still working but that the audit was very important to it.
According to him, the technical audit report is necessary to enable the APPIT know the cost implication.
He added that because of the complexity of the Ajaokuta Steel Complex, online audit was not possible as people had to be physically present.
The minister added that government was making efforts to mitigate the effects of the COVID-19 pandemic on the sector.
“Now, government needs to come up with a response because the COVID-19 pandemic has adversely affected our sector, as a lot of miners could not go to work for obvious reasons.
“The consequence of this is that the output is zero and a lot of miners had been impoverished, this, however, is not peculiar to the sector, because it goes all round.
“What the President Mohammadu Buhari-led administration has decided to do is to face this head-on, and that is why we have come up with post COVID-19 rescue operations.
“In this, the government proposes to spend N2.3 trillion; this is what the government intends to inject into the economy to counter the effect of the COVID-19 pandemic,” he said.
The minister said that the money had been allotted to different sectors of the economy, including the solid mineral sector.
“A large chunk of the money had been allotted to the sector to help counter the effect of the COVID-19 pandemic.
“We intend to spend this fund and some other funds that are available to us to improve artisanal mining in the country and deepen our explorative projects,” Adegbite said.
He further said that the ministry was determined to take its road shows round the world to attract foreign investors into the country post COVD-19.
He gave assurance that government was working and putting measures in place to ensure that the country come up ahead of the COVID-19 curve to ensure that its effects are minimal.
In a related development, the House of Representatives has commenced investigations to identify and block revenue leakages that cost Nigeria in excess of $30 billion annually.
The investigative hearing, which began on Monday in Abuja, was organized by the joint house committees on Finance, Banking and Currency.
The Speaker of the house, Rep. Femi Gbajabimila, said that Nigeria is facing significant revenue challenges as a result of global collapse in the price of crude oil.
He said that collapse of oil price had brought about severe and ongoing contraction in the global economy.
According to him, the sum of these is that we do not have the resources we need to deliver on our development ambitions and the infrastructure projects we have committed to.
Gbajabimila said that under the circumstances, it was unconscionable that Nigeria is still losing vast sums of money to avoidable leakages in the system.
The speaker said that the House of Representatives had resolved to identify the sources of the leakages and block them.
He said that the systemic failures that have either created the leakages, or caused them to persist must be addressed.
“We will follow on from that by taking necessary action to propose and implement solutions that will ensure our country no longer loses these huge sums, we desperately need to build infrastructure and support enterprise that creates jobs for our people.
“For this Joint Committee to deliver on the mandate of the House in this instance, there is a need to work with the ministries, departments, and agencies of the government.
“This effort by the House is in fulfillment of our constitutional obligations and we intend to act always with integrity and diligence in the best interest of our nation.
“I encourage our executive colleagues to see this as an opportunity for constructive collaboration in the national interest,”he said.