The Presidential Economic Advisory Council (PEAC) on the impacts of COVIC-19 on the Nigerians economy yesterday submitted its report saying the economy was in a parlous state even before the outbreak of the disease.
The governor of Nasarawa State, Mr. Abdullahi Sule who disclosed this said the report was submitted to the National Economic Council (NEC) chaired by the vice president, Prof. Yemi Osinbajo.
Briefing journalists at the end of the monthly meeting of NEC Sule said the report indicated that before the outbreak of the deadly coronavirus, the economy of the country was fragile, vulnerable and deteriorating
“Output growth, though rising, remains weak and fragile -being outstripped by population growth; almost a quarter of the economy was shrinking, contracting.
“The beginning of a new cycle of faster increase in prices and inflation ended the year at 11.98 per cent impaired with 11.44 percent in 2018.
“Rising deficit and debt service payment increasing funded from ‘ways and means’ borrowing which leads to money supply growth. This poses a threat to inflation and the exchange rate,’’ he quoted the report.
He said the further showed how external influences drive the Nigerian economy – trade, capital inflows, policy, and diaspora transfers.
Besides, the governor said the report indicated that the impact of coronavirus on the Nigeria Economy would affect oil sector while stressing that both price and quantity are expected to fall.
“Both import and export will fall but it is likely that import will fall by less than export.
“Fall in import will be expected to adversely affect production input leading to fall in output and rising unemployment – this will worsen the fate of the manufacturing sector.
“While rising unemployment will weaken demand, import disruptions are also likely to raise cost and inflation.
“At a time of wide-spread uncertainty and capital flight towards safety, Nigeria should not expect the premium derived from keeping interest rates high will be adequate to keep Foreign Portfolio Investors from considering safety,’’ he added.
The governor further disclosed that the minister of finance, budget and national planning updated the NEC on the balance of the excess crude account which as at March 17, 2020, stood at $17,220, 756; the stabilization account, N35, 806, 389, 699. 67 while the Natural Resources Development Fund Account was N109, 360, 903,475.60 during the period.
He also disclosed that the Council received an update on the ownership review and the analysis of the distribution companies (DisCos), saying final report on the electricity reform would be circulated in due course.
