Nigeria’s excess crude account falls to $72.4m, rakes N940.9bn in Q1

The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed has said the excess crude account balance as at 21st May 2020 stands $72.4 million while the stabilisation account balance as of yesterday stood at N39. 33 billion.

Zainab, however, disclosed that the nation’s net oil and gas revenue inflows to the federation account in the first three months of 2020 amounted to N940.91 billion.

Giving her brief at the nation’s virtual Economic Council meeting on Thursday, she noted that the Natural resources development fund account balance as of 21st May 2020 was at N125.19 billion.

According to her, to prevent a deep recession arising from the COVID-19 economic crisis, the orthodox approach all over the world, which is also in the works in Nigeria, is to deploy a stimulus package.

“Nigeria is faced with perhaps the most challenging economic challenge in its history. Giving a briefing at the virtual National Economic Council Meeting she said that Nigeria’s economy could shrink as much as 8.9 per cent in 2020 in a worst-case scenario without stimulus, a deeper recession than forecast after oil prices plunged due to the coronavirus pandemic.”

Ahmed said that the contraction could reach 4.4 per cent in a best-case scenario, without any fiscal measures. But with the stimulus, the contraction could be kept to just 0.59 per cent, she said. The pandemic and an oil price plunge have not only hit growth but also dented the state’s main source of income, creating large financing needs and weakening the Naira.

“We will go into recession – but what we are trying to do is to make sure that it is shallow so that we will quickly come out of it, come 2021,” Ahmed said at the council in a virtual meeting.

She said 40 per cent of Nigerians were poor and the crisis would increase poverty. Ahmed said Nigeria had over 6,000 confirmed cases of the novel coronavirus, but that this could rise to almost 300,000 by the end of August. So far 200 people are confirmed to have died with the virus.

A World Bank director taking part in the meeting said the Bank was planning a package for immediate fiscal relief for Nigeria.

Ahmed said the proposal was worth $1.5 billion and intended for Nigeria’s states to provide relief at the sub-national level.

She said it could be disbursed by September.

Ahmed said that the global economy is also facing its sharpest reversal since the great depression and these have health and economic implications.

She said that COVID-19 has resulted in the collapse in oil prices, stressing that this will impact negatively on Federation revenues and Foreign exchange earnings”.

Members of the National Economic Council (NEC) it was gathered rose from their first virtual meeting with a resolution to ensure a more effective synergy between the Federal Government and the sub-nationals especially in matters related to the fallouts of the COVID-19 pandemic, including how to effectively and efficiently reopen the Nigerian economy after the lockdowns and shutdowns across the country.