Nigerian Budgetary Response to the COVID-19 Pandemic and its Shrinking Fiscal Space: Financial Sustainability, Employment, Social Inequality and Business Implications

Purpose: This article aims to explore the Nigerian government’s budgetary response to the COVID-19 pandemic as well as the economic and social implications of the pandemic response.

Design/methodology/approach: Our analysis is based on a review of secondary evidence such as Nigerian Federal Government budget documents, policy documents, Central Bank of Nigeria circulars, news media articles, World Bank and International Monetary Fund reports, Reports from Big Four accounting firms and policy think-tanks.

Findings: We highlight how increased borrowing to fund COVID-19 related economic and social interventions have significantly squeezed Nigeria’s fiscal space. We also highlight that while some interventions provide short term economic relief to the poor and small businesses, other interventions and gaps in the policy response have the potential for significant negative impact on businesses, households and unemployment. In addition, we highlight the potential for long-term benefits to the health sector and for private sector engagement in corporate responsibility and philanthropy.

Originality/value: We present a comprehensive account of the Nigerian government’s budgetary response to the COVID 19 pandemic and the economic and social implications of this response.