[OPINION]: Managing the economy after the pandemic
Last week, a Citizen Dialogue event was hosted by the Ministry of Finance, Planning and Budget to examine the fallout from COVID-19 and the implications for the budget and management of the economy. The outcomes from that exercise seem to have passed largely unnoticed by the informed public. I have always taken the view that the social and economic consequences of the global pandemic far outweigh its real epidemiological impact.
From all intents and purposes, the government has succumbed to borrowing $3.4bn from the IMF relief facility. It is a moment of truth for Nigerian economic management. I have nothing against the IMF. As a matter of fact, I have always enjoyed working with and interacting with colleagues from that the Fund, whom I find wittier and smarter than their colleagues from the World Bank. I do understand that the IMF loan comes with a three-year moratorium.
The Nigerian Economic Summit Group headed by my friend, Laoye Jaiyeola, in its contributions to the dialogue, estimates that the government will need some N10.1tn of intervention funds to address the economic and financial crisis, but also notes that only about N4.5tn is on the ground. This leaves a funding gap of N5.6tn which could be filled by a mixture of domestic and external borrowing and Quantitative Easing.
The government, I’m aware, is committed to boosting the agricultural value chain, enhancing industrial production and ensuring a robust health and pharmaceutical sector. The Central Bank of Nigeria has backed these objectives with some intervention funds. But we need more robust strategies to boost employment and job-creation. One of the best ways I know to do this is through public works scheme.
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