It is no longer news that Nigeria has again slid into another recession few months after getting out of the last one. What is probably cheery is that the current recession will be short-lived, and that is according to the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed.
The minister who spoke at the ongoing 26th Nigerian Economic Summit organised by the Nigerian Economic Summit Group and the Federal Ministry of Finance, Budget, and National Planning assured that Nigeria would emerge from the recession in the fourth quarter of this year or at most by the first quarter of 2021.
Nigeria, which is touted as Africa’s biggest economy, entered its second recession in five years in the third quarter of this year as the Gross Domestic Product (GDP) fell for the second consecutive quarter. The GDP dropped by 3.62 per cent in Q3 and 6.10 per cent in Q2, according to the National Bureau of Statistics (NBS). Ahmed added that the dreaded coronavirus (COVID-19)-induced recession followed the pattern across the world where many countries had entered an economic recession.
She said, “Let me remind us that before the impact of COVID-19, the Nigerian economy was experiencing sustained growth, which had been improving quarter-by-quarter until the second quarter of 2020, when the impact of the COVID-19 was felt.” According to her, Nigeria is not alone on this negative journey as countries such as the United Kingdom (UK) and the United States (US), recorded much deeper contraction than Nigeria.
Again, she added, “Nigeria is not alone in this, but I will say that Nigeria has outperformed all of these economies in terms of the record of a negative growth.” South Africa, which recorded a decline of -50 per cent compared to Nigeria’s -6.1 per cent in Q2, will also record a deeper negative growth in Q3 than Nigeria, the minister explained.
“While the economy has entered into recession in the third quarter, the trend of the growth suggests that this will be a short-lived recession, and indeed by the fourth or, at worst, the first quarter of 2021, the country will exit recession. Our expectation of a quick exit, which will be historically fast, is anchored on the several complementary fiscal, real sector and monetary interventions that have been proactively introduced by government to forestall a far worse decline of the economy and alleviate the negative consequences of the pandemic.”