The Nigerian government is in the process of accessing a $750m World Bank loan on behalf of states, the country’s Minister of Finance, Budget and National Planning, Zainab Ahmed, announced Friday.
According to Ahmed, the facility will boost the local economy in the various states, adding that the Federal Government was also considering the cause and consequences of civil unrest and COVID-19 across the country.
“The Federal Government is in the process of accessing a World Bank loan of $750m on behalf of the states to stimulate the local economy and support vulnerable household’s consumption,” Ms. Ahmed said at the inauguration of the Federal Steering Committees of the Nigeria COVID-19 Action Recovery and Economic Stimulus.
The minister noted that the consequences of the civil unrest and COVID-19 impact in Nigeria would be too high if the government ignores the root cause of rising anomaly in Nigeria.
She said that “we must, therefore, fashion out ways of ensuring that post COVID-19 is not injurious to the Nigerian people and the economy.”
The committee, according to Ahmed, was made up of ministers and permanent secretaries, as well as a Technical Committee, that consists of directors of key ministries, departments, and agencies.
She said, “The inauguration of the committees is expedient given the nature of this emergency intervention. Nigeria as the biggest economy in Africa cannot afford to remain in a recession.
“The survival of over 200 million population is germane to all we do and we must address the concerns of the majority of our populace.”
Ahmed also said Friday that Nigeria’s inflation rate is majorly driven by transport cost.
Headline inflation, which has risen for 13th consecutive month is projected to rise to 14.5% in October after hitting 13.71% (year-on-year) in September 2020, a 0.49% rise over the 13.22% rate recorded in August 2020.
The minister, who spoke at a virtual consultation and stakeholder engagement in Abuja on the economic and fiscal policy drivers underpinning the Finance Bill 2020, said the draft bill sought to reduce transportation cost in the country.
The country has continued to witness increased transport costs in recent months largely due to the increase in the pump price of petrol, otherwise known as premium motor spirit (PMS), which is commonly used by many commercial transporters.
According to the latest data from the National Bureau of Statistics (NBS), the average transport fare paid by commuters for bus journeys within a city increased by 12.70 per cent month-on-month and 48.02% year-on-year to N278.88 in August.
Ahmed stated that the Finance Bill 2020 contained “some interesting new proposals,” citing “fiscal relief for mass transit which is designed to provide support to mass transit by reviewing the duties regime.”
The minister stressed that “the essence why this is being done is we recognise transportation as one of the major cost drivers in the economy.”
According to her, “If you look at the rate at which our inflation is going, and you disaggregate the components, you will find that inflation is largely driven by transport cost. So, the essence here is to reduce transportation cost so that businesses will have ease and pass benefits to eventual consumers.”
By Abel Ejikeme