The federal government yesterday revealed that it spent over N1.5 trillion in managing the effects of COVID-19 in the country. Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, disclosed this during a media briefing in Abuja.
The briefing was attended by Minister of Information and Culture, Alhaji Lai Mohammed; Minister of State for Finance, Budget and National Planning, Mr. Clem Ikanade Agba; and the newly appointed Statistician–General of the Federation, Dr. Simon Harry.
Ahmed took a holistic look at the recent second quarter (Q2) 2021 Gross Domestic Product (GDP) report released by the National Bureau of Statistics (NBS), which showed a 5.01 per cent growth. She said the growth rate was an indication that business and commercial activities had fully returned to pre-pandemic level.
The minister also predicted that if necessary economic measures and policies were put in place and sectors, such as agriculture, were improved upon, the economy would maintain a five per cent growth rate in the third quarter (Q3) of the year.
According to the NBS Q2 GDP report, the economy grew 5.01 per cent (year-on-year) in real terms in the second quarter of the year (Q2 2021), compared to the -6.10 per cent recorded in Q2 2020. This marked three consecutive quarters of growth following the negative growth rates of -6.10 per cent and -3.62 per cent in Q2 2020 and Q3 2020 year-on-year, respectively.
Explaining the specific activities, which recorded growth during the quarter under review, the finance minister said trade, transportation, coal mining, metal Ores, and insurance recorded double-digit growth.
Ahmed stated, “The report, however, also indicate that some activities, such as oil refining, crude petroleum, and natural gas production, as well as financial services, recorded negative quarterly growth.
“Overall, a total of 42 out of 46 economic activities expanded during the quarter, compared to only 13 at the same time last year, while 37 activities performed better than they did last quarter (Q 1).”
The minister explained further that the non-oil sector was a major driver of growth during the quarter, recording a growth rate of nearly seven per cent. This, according to her, represents the fastest growth in the non-oil sector since Q3 2014.
“When these estimates are considered along with declining inflation rate, which slowed from 18.17 per cent at the end of Q1 to 17.75 per cent at the end of Q2, and as at July, which stands at 17.38 per cent, it is clear that the economic recovery is gradually picking up steam.”
Ahmed was hopeful that with favourable global economic conditions expected as economic activities and normalcy returned across major economic sectors, and local conditions continued to improve to allow business activities, the Nigerian economy would maintain a steady path to more inclusive growth.
On the growing domestic and external borrowings, the minister maintained that the federal government was borrowing responsibly, saying, “if we don’t invest now, we will regret it later.”
Speaking on the cost of managing the effect of COVID-19, the minister revealed that the federal government spent over N1.5 trillion in managing the effects of the pandemic.
Speaking at the occasion, the statistician-general said the federal government only needed to improve and sustain its revenue drive.
According to Harry, “From all that is happening now and the improvement of funding of this year’s budget, the third quarter of this year is going to record a tremendous success.
“In managing an economy, you don’t expect magic if there is no adequate funding of the economy. So far so good, this year has been recording timely releases of budgetary allocations for all MDAs and we expect that to have multiplier effects on other sectors of the economy. So, what we need to do to encourage this is to look at other sectors that are not performing; for instance, in Q2, agriculture performance was not encouraging.
But with improvement in funding, we are hoping that agriculture and other sectors under it will improve. Overall, we are expecting that by end of the year, the economy will able to grow above five per cent.”