Nigerian Economy Going into Recession, Might Contract By -8.9%

• The Nigerian economy is expected to record negative growth as it falls into recession due to the outbreak of the coronavirus pandemic and collapse in oil prices.
• This oil price crash and coronavirus pandemic outbreak also affected the country’s economic growth and weakened the naira
• Nigeria’s economic growth could contract in the worst-case scenario by as much as -8.94 per cent in 2020.

The Nigerian economy is expected to record negative growth as it falls into recession due to the outbreak of the coronavirus pandemic and collapse in oil prices.

This was announced by the Minister of Finance, Budget and National Planning, Zainab Ahmed, during a press conference after the first virtual meeting of the National Economic Council (NEC), chaired by Vice President Yemi Osinbajo.

The minister said that the ravaging coronavirus pandemic is not only affecting the country economically but also affecting the health sector, as the resources to fight this appear inadequate.

She stated the crash in crude oil prices would have a negative impact on the country ‘s revenue and foreign exchange earnings.

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This oil price crash and coronavirus pandemic outbreak also affected the country’s economic growth and weakened the naira.

According to the Finance Minister, “Net oil and gas revenue input to the federation account in the first quarter of 2020 amounted to N940.91 billion. This represents a shortfall of N125.52 billion.

‘’But with the work that the Economic Sustainability Committee is doing bringing up a stimulus package, we believe that we can reduce the impact of that recession.”

Going further, Zainab Ahmed said, “And if we apply all that has been proposed and we are able to implement it we might end up with a recession that is -0.4%. But in any case, we will go into recession but what we are trying to do is to make sure that it is shallow so that we will quickly come out of it come 2021’’

According to Channels Television news, Ahmed also reported that Nigeria’s economic growth could contract in the worst-case scenario by as much as -8.94 per cent in 2020. She also said it could be a contraction of -4.4 per cent in the best-case scenario if there was no stimulus and a contraction of 0.59 per cent if there was a fiscal stimulus package.