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The Federal Government said the coronavirus pandemic and falling oil prices are set to force the economy into negative growth.
As at Wednesday May 20, global crude oil prices rose above $30 a barrel but still just half the level it was at the start of the year . This was due to the deep supply cuts that negative prices accelerated across the industry, from coordinated reductions by Organisation of Petroleum Exporting Country, OPEC and Russia to the dramatic slowdown of drilling in the US, according to Business Day.
But the Minister of Finance, Zainab Ahmed, speaking on the economy after the National Economic Summit meeting in Abuja on Thursday, said COVID-19 has resulted in the collapse in oil prices.“This will impact negatively, and the impact has already started showing on the federation’s revenues and on the foreign exchange earnings.
Ahmed said Net oil and gas revenue and influx to the federation account in the first quarter of 2020 amounted to N940.91billion. “This represented a shortfall of N125. 52billion or 31% of the prorated amount that is supposed to have been realized by the end of that first quarter,” she added.
The finance minister further added that the economic contraction will multiply the misery of the poor.
“The crisis will only multiply this misery,” she said. “The economic growth in Nigeria, that is the GDP, could in the worst case scenario, contract by as much as –8.94% in 2020. But in the best case, which is the case we are working on, it could be a contraction of –4.4%, if there is no fiscal stimulus. But with the fiscal stimulus plan that we are working on, this contraction can be mitigated and we might end up with a negative –0.59%.”
