The Federal Government has expressed its determination to continue funding the 2020 budget to ensure that the economy recovers as projected, even as the country’s Gross Domestic Product (GDP) contracted by -6.10 percent in the second quarter of 2020.
The Minister of Finance, Budget, and National Planning, Mrs. Zainab Ahmed, made the disclosure on behalf of the government saying it remains committed to fully funding the 2020 Amendment Budget as well as the economic sustainability plan (ESP), to accelerate the fiscal responses to the deteriorating economic situation nationwide.
Recall that in the recent GDP report by the National Bureau of Statistics (NBS), both oil and non-oil sectors of the economy recorded negative growths in the second a quarter of the year, a situation many financial analysts believe does not look good for the country.
However, Ahmed stated that “Federal Ministry of Finance, Budget and National Planning is releasing the 2020 capital budget vote to ministries, department, and agencies (MDAs) based on their approved Economic Sustainability and implementation plans.
Specifically, the Ministry has already released capital votes for all federal MDAs at a minimum of 50 percent and is in the process of releasing targeted funds to cash-back priority capital projects.
“Under the enhanced fiscal management framework, optimal treasury operations, as stated, would be key to ensure that time-sensitive expenditures are prioritised over less critical spend; cash management is enhanced to accelerate the conversion of liquidity into the achievement of optimal outputs and outcomes; and financial controls are strengthened to detect and eliminate instances of waste, funds misappropriation, and corruption.”
Speaking further, the minister disclosed that the Federal Government is also supporting states to contain the health and economic challenges arising from the COVID-19 pandemic as well as the decline in oil revenues due to price and production challenges.
The government is implementing an enhanced consequence management framework to assess the impact of current spending by MDAs as well as to inform future allocations to MDAs. A suite of sanctions is being finalised to enforce this consequence management Framework, she said.
Ahmed further stressed that the government’s anticipation of the impending economic slowdown which it had communicated to the public much earlier and accordingly the various initiatives it introduced early as a response to cushion the economic and social effects of the pandemic may have contributed to dampening the severity of the pandemic on growth.