The federal government of Nigeria has warned that the nation risks a return to recession unless there is a strong third quarter economic performance.
Minister of State for Finance, Budget and National Planning, Clement Agba disclosed this yesterday while representing the Minister for Finance, Budget and National Planning Mrs. Zainab Ahmed, at an interactive session organised by the House of Representatives Joint Committees on Finance, Appropriation, Budget and Economic Development as well as Loans and Debt Management.
According to Agba, the looming recession which is set be the second in four years would come with grave consequences as the situation puts further pressure on the foreign exchange market as a result of foreign portfolio investors exit from the Nigerian market.
He said: “To enhance Independent Revenue generation and collection, Government will optimize the potentials. operational and collection efûciency of GOEs with a view to generating higher revenues required to fund the FGN budget.”
“Current revenue performance of GOEs will be addressed through the effective implementation of the enhanced Performance Management Framework. The key elements of the reform initiative include Performance Contracts for Chief Executive Ofûcers (CEOs) and key management staff, which will set ûnancial indicators and targets for each GOE.”
“The cost-to-revenue ratio of GOEs has by a Presidential directive been limited to a maximum of 60 per cent-70 per cent. While regular monitoring and reporting of revenue and expenditure performance of GOEs will be undertaken by both the Budget Office of the Federation and the Ofûce of the Accountant General of the Federation”
“We have revised the 2020 FGN budget and will accelerate implementation to maintain budget credibility, enhance GDP growth and promote social inclusion. The draft 2021 — 2023 MTEF/FSP has been prepared against the backdrop of a global recession and heightened global economic uncertainty.”
“The draft 2021-2023 Medium Term Fiscal Framework shows that there are continuing global challenges due to the COVlD-19 pandemic. The medium-term outlook for Nigeria suggests that ûscal risks are somewhat elevated, largely due to Covid-19 related disruptions which have exacerbated structural weaknesses in the economy.”
The government also warned that Nigeria faces significant medium-term fiscal challenges, especially in revenue generation, which if not immediately addressed, could snowball into a debt sustainability crisis.