The Federal government has said its fiscal and monetary policy initiatives counter COVID-19 challenges, stressing that it was able to reduce the economic and social effects of the pandemic.
The federal government also noted that the Economic Sustainability Programme (ESP), contributed immensely to dampening the severity of the pandemic on the growth of the nation’s economy.
The Special Adviser to the President, (Media and Publicity), Femi Adesina in a circular titled, “Our Response to Q2, 2020 NBS Figures, By Presidency”, stated that, “The government’s anticipation of the impending economic slowdown and the various initiatives introduced as early responses to cushion the economic and social effects of the pandemic, through the ESP, contributed immensely to dampening the severity of the pandemic on growth.”
The National Bureau of Statistics (NBS) published on Monday the second quarter (Q2) 2020 Gross Domestic Product (GDP) with a decline of –6.10per cent (year-on-year) in real terms in the second quarter of 2020, ending the 3-year trend of low but consistently improving positive real growth rates recorded since the 2016/17 recession.
Consequently, for the first half of 2020, real GDP declined by –2.18per cent year-on-year, compared with 2.11per cent recorded in the first half of 2019.
The overall decline of -6.1per cent (for Q2 2020) and -2.18 per cent (for H1 2020) was better than the projected forecast of -7.24per cent as estimated by the NBS.
According to him, the figure recorded by Nigeria was also relatively far better than many other countries recorded during the same quarter.
He explained that, “Furthermore, despite the observed contraction in economic activity during the quarter, it outperformed projections by most domestic and international analysts.”
“It also appears muted compared to the outcomes in several other countries, including large economies such as the US (-33 per cent), UK (-20 per cent), France (-14 per cent), Germany (-10 per cent), Italy (-12.4 per cent), Canada (-12.0 per cent), Israel (-29 per cent), Japan (-8 per cent), South Africa (projection -20 per cent to -50 per cent), with the notable exception of only China (+3 per cent).”
Highlighting FG’s fiscal policy, he explained that a robust financing mechanism was designed to raise revenue to support humanitarian assistance, in addition to special intervention funds for the health sector.
“Adjustments to the national budget as well as emergency financing from concessional lending windows of development finance institutions were critical in supporting governments’ capacity to meet its obligations,” he explained.
On the monetary side, he explained that, “moratorium on loans, credit support to households and industries, regulatory forbearance and targeted lending and guarantee programs through NIRSAL were some of the measures implemented in response to the pandemic during the second quarter.
“It is equally worth noting that since the start of the third quarter, the phased approach to easing the restrictions being implemented centrally and across States have resulted in a gradual return of economic activity, including the possibility of international travel.”
More importantly, the anticipated health impacts of the pandemic have been managed without overwhelming the health infrastructure, which would have further compromised the ability to re-open the country to travel, commerce and international trade. Indeed, this has provided greater confidence and ability for authorities to initiate the conduct of nationwide terminal examinations and resumption of the next academic year.
He added that, “Finally, it is anticipated that while the third and fourth quarters will reflect continued effects of the slowdown, the Fiscal and Monetary Policy initiatives being deployed by government in a phased process will be a robust response to the challenges posed by the COVID-19 pandemic.
“Furthermore, as the country begins the gradual loosening up of restrictions, and levels of commercial activity increase by people returning to their various livelihoods and payrolls expand, it still remains imperative that all the necessary public health safeguards are adhered to so the country avoids an emergence of a second wave.”