While the size differs across countries, the presentation demonstrates that the Pandemic has adversely affected growth and fiscal performance.

In the case of Nigeria, there exists considerable gaps between additional borrowing and new capital expenditure; and borrowing externally has become more expensive.

The paper makes the case for expanding the analytical toolkit for fiscal policy analysis in Nigeria by assessing long-term fiscal sustainability through the permanent income hypothesis. This framework indicates that for a highly resource-dependent country, such as Nigeria, the intertemporal budget constraint is satisfied when the non-oil primary fiscal deficit is limited to the perpetuity value of resources wealth. It equally recommends moving toward a balance sheet approach to fiscal analysis. This involves replacing debt as the fundamental indicator of the financial position of the government with what is known as ‘net worth’. Net worth is the value of all assets minus the value of all liabilities. Once governments understand the size and nature of public assets, they can start managing them more effectively, raising considerable additional revenue.