Nigeria, Angola May Suffer $65bn Revenue Loss – AU Study
An African Union (AU) study has predicted a revenue loss of $65 billion for Nigeria and Angola alone as a result of the coronavirus pandemic.
Reuters reports said that being the biggest oil exporters, the two countries will suffer a lot of budget deficits as a result of the coronavirus.
The report said about 20 million jobs are already at stake in African continent in view of the pandemic.
In the study titled “Impact of the Coronavirus on the Africa Economy”, the report said African economies were already facing serious downturn since the outbreak of the pandemic.
The report said African economic will likely shrink by 0.8 per cent, with pessimistic view that predicts a 1.1 per cent dip with the fear that 15 percent of foreign direct investment may disappear.
According to the report, “Nearly 20 million jobs, both in the formal and informal sectors, are threatened with destruction on the continent if the situation continues.”
The report said exports and imports are likely to drop at least 35 per cent from 2019 levels, in what will lead to a loss of value of trade of about $270 billion.
The report added, “Sub-Saharan Africa’s biggest oil producers, Nigeria and Angola, alone could lose $65 billion in income. African oil exporters are expected to see their budget deficits double this year while their economies shrink three per cent on average.”
Meanwhile, Nigeria is seeking for a $7.050 billion from multilateral institutions and the Nigeria Sovereign Investment Authority (NSIA) to alleviate the impact of the coronavirus on the economy.
The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, who gave a breakdown said $3.4 billion will be sourced from the International Monetary Fund (IMF), $2.5 billion from the World Bank and $1 billion from the African Development Bank (AfDB).
She added that the sum of $150 million will be from NSIA.
Briefing newsmen Monday, Ahmed said, “Nigeria has a contribution of $3.4 billion with IMF and we are entitled to draw up to the whole of that $3.4 billion or less. We have in the first instance applied for that maximum amount; then in the process when we negotiate, we might get the maximum amount or less but that is the amount of our contribution with IMF and this is the provision that IMF has made for every member-country that you can apply for between 50 to 100 per cent of your contribution to IMF.
“Again, this is a programme that has no conditions attached to IMF programmes and this is not an IMF programme.”
“During the process of reviews and negotiations, the proportion could change but the request we are making is on behalf of the federation, in all of these multilateral institutions.”
She added, “ decline in international oil prices and domestic production may be magnified if a severe outbreak of COVID-19 occurs, despite ongoing efforts to curtail the spread of the pandemic through compulsory lockdown of Lagos and Ogun states as well as the Federal Capital Territory (FCT).”
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