Fear expressed by Federal Government, a fortnight ago, that about 39.4 million Nigerians may be jobless by the end of the year as a result of the impact of the COVID-19 could be averted if stakeholders key into CBN’s incentives, Abdulwahab isa reports
Anticipated job losses alarm this time isn’t from strange quarters. Warning about potential risks Coronavirus pandemic poses to the economy is neither by labor unions nor NGOs.
The Vice-President, Prof. Yemi Osinbajo, recently painted the gloomy picture of Nigeria’s struggling economy amid Covid-19. He is the Head, Economic Sustainability Committee set up by President Muhammadu Buhari to assess implications of Covid-19 on Nigeria’s economy and proffer solutions.
Four months into the pandemic, jobs are beginning to drop off on a scale never imagined. While workers in the public sector are extremely lucky, they are taking their salaries in the face of the pandemic and lockdown, employees on private sector are worse affected.
Most private outfits, including reputable conglomerates, have laid off staff in the past months. The lucky ones, who still have their jobs, suffer salary cuts. A third scenario is a set of employees, who forgo their salaries till further notice when normalcy returns to the economy.
Figures are products of thorough analysis conducted by experts. When Federal Government raised the alarm to the effect that except something urgent was done, about 39.4 million Nigerians may be jobless by the end of the year as a result of the impact of the the pandemic, it shows that the looming danger is real.
In addition to anticipated job losses in millions, the Federal Government feared millions more may slide into extreme poverty before the pandemic ends. In essence, tough times lay ahead for vulnerable Nigerians.
Osinbajo gave the gloomy picture recently in Abuja while presenting the report of the Economic Sustainability Committee to President Muhammadu Buhari
The president set up the committee on March 30, 2020 in response to a glaring threat to the global economy by the pandemic, especially Nigeria whose main source of earning is oil.
Presenting the report to Buhari, Osinbajo noted that the lockdowns and social distancing measures put in place to curb the spread of COVID-19 had severe negative impact on farms and factories as well as trade, transport and tourism.
The catalogue of losses going by Osinbajo’s report will extend to federation purse. He said the federation might experience a shortfall of about N185 billion monthly in the amount available for allocation to the three tiers of government.
“Several projections, including those done by the NBS on behalf of the Economic Sustainability Committee, showed a severe downturn in our oil earnings, as a result of which, even with oil price at $30 a barrel, we would still have a shortfall of about N185bn every month in the amount available for allocation to the three tiers of government.
“They showed that unemployment may rise to 33.6 per cent or about 39.4 million people by the end of 2020, if we fail to take prompt preemptive measures.
“They showed that millions more will fall into extreme poverty before the pandemic ends; and that GDP may fall to between -4.40 per cent and -8.91 per cent, depending on the length of the lockdown period and strength of our economic response.”
Nothing is new about Osinbajo’s committee’s findings. The International Monetary Fund (IMF) had alluded to similar tough economy terrain for Nigeria in its recent global economy forecast.
In the report titled ‘Bouncing back: The Nigerian economic sustainability plan,’ Osinabjo said the committee recommended that government embark on mass job creation to cushion the effect of the pandemic.
“We have, therefore, recommended that we must carry out mass programmes that create jobs and utilize local materials.”
The committee also recommended the expansion of the Social Investment Programme through an increase in the number cash transfer beneficiaries, N-Power volunteers and sundry traders enjoying small and micro loans through the MarketMoni and TraderMoni schemes.
Talking about implementation which he said was critical to the success of the plan; Osinbajo said the committee recommended that each minister would be responsible for supervising the implementation of plans situated in their respective ministries.
Targeted incentives by CBN
Nigeria’s apex bank, the Central Bank of Nigeria (CBN), is not only active since COVID-19 outbreak in Nigeria, the bank has launched series of interventions, palliatives targeted at mitigating impacts of the pandemic both on economy and sources of livelihood of Nigerians.
The bank’s interventions are targeted at each sector of the economy. As part of effort to revive textile sector and keep productive hands in that segment engaged, the bank two weeks ago unveiled fresh incentives for cotton farmers.
The same goes for other critical stakeholders in agriculture sector where the apex bank is mobilising resources for 1.6 million farmers in the 2020 wet season across the country.
At Kwali, an outskirt of Federal Capital Territory of Abuja, the apex bank distributed farm inputs to cotton farmers for 2020 planting season. The distribution of cotton seedling and other materials would go a long way to ease financial burden that would have been incurred by the cotton farmers.
The bank last week also announced plans to release framework for the integration of non-interest window in all its intervention programmes, including the Anchor Borrowers’ Programme (ABPs) and the targeted credit facility to support households and Micro, Small and Medium Enterprises (MSMEs) affected by the pandemic.
Besides, the bank said it would fund value chains of nine commodities to the tune of N432 billion in the 2020 wet season.
CBN’s Director, Corporate Communications, Isaac Okorafor, and the bank’s Director, Development Finance Department, Mr. Yila Yusuf, who jointly represented CBN Governor, Mr. Godwin Emefiele, made the pledge at a stakeholder meeting in Abuja.
The meeting was to review the successes recorded under ABPs and the strategies for the 2020 agricultural wet season.
Okorafor said the creation of a non-interest window followed appeals by concerned stakeholders for farmers across the country to also be considered for funding under the non-interest window.
While revealing that work had been concluded on the funding document, he said the policy would be issued shortly outlining how farmers under the category could apply and benefit from the agricultural programmes of the CBN.
The bank reiterated its commitment to support agriculture in 2020 wet season, and spur farmers along select crop value chains to prevent the country from sliding into a recession, as is currently being experienced in some major economies of the world.
Yusuf said the target for the 2020 agricultural wet season was to advance about N432 billion, through the participating banks in the value chains of nine commodities.
He added that over 1.1 million farmers, cultivating over one million hectares of farmland, were expected to benefit from the loans that will help to produce a collective output of 8.3 million metric tons.
He said the focus for the 2020 wet season was to ensure the provision of improved seeds to incentivise the farmers to return to their farms. He added that CBN adopted the value chain approach across all the commodities to ensure that every player along the entire value chain, from the farmers through to the processors, was financed.
The bank’s funding of the Anchor Borrowers’ Programme (ABP) for the 2020 season was the highest since the inception of the programme in 2015.
This, he said, was quite significant considering the successes recorded in the 2019 season that contributed to shielding Nigeria from any food shortage, particularly rice, in the heat of the global lockdown during which some major producing countries of staples, such as rice, closed their silos and halted the export of those produce from the shores of their respective countries.
Speaking on the Targeted Credit Facility (TCF) of the bank aimed at alleviating the impact of the Coronavirus on individuals and small businesses, Okorafor noted that the bank was determined to push the economy to ensure Nigeria does not experience consecutive quarters of negative growth.
To ensure Nigerians, who applied for COVID-19 stimulus loans are not left in wilderness, the CBN governors was said to have directed development finance department of the bank as well as the NIRSAL Micro-finance Bank (NMFB) to fast-track the approval process of loans meant to help restore businesses and livelihoods.
At the inception of the pandemic in March 2020, the Federal Government announced some policy measures amongst which include reduction of interest rates and costs of borrowing, tax cuts and tax holidays.
These measures are quite remarkable. Regrettably, private sector players, who are the beneficiaries of these incentives are yet to reciprocate government’s gesture. Most of them still indulge in sacking of workers. Government must condition the incentives to halt sack of employees by private sector operators. Access to these incentives must be tied to staff retention.
Incentives by CBN if complemented by other stakeholders will avert the looming recession and job losses associated with COVID-19 crisis.