Current Recession Won’t Last Long—Nigeria Assures

January 4, 2021
Lai Mohammed briefing

By Modupe Gbadeyanka

In the third quarter of last year, Nigeria officially entered another recession four years after the first under President Muhammadu Buhari.

This was as a result of the decline in the nation’s gross domestic product (GDP) in the second quarter (-6.10 per cent) and in the third quarter (-3.62 per cent) of 2020.

But the federal government has expressed confidence that the current economic crisis would be short-lived because of the policies put in place by the administration.

The Minister of Information and Culture, Mr Lai Mohammed, while addressing journalists in Lagos on Monday, said very soon, Nigeria will exit recession.

When the country was plunged into recession in the second quarter of 2016, it remained in the dungeon for five consecutive quarters. It exited a year later.

But Mr Mohammed, during his media briefing today, assured that this time around, the country will not stay long in the crisis.

“The current recession will not last long, and Nigeria will soon return to positive growth,” the Minister said, noting that this was because of the “several complementary fiscal, real sector and monetary interventions proactively introduced by the government to forestall a far worse decline of the economy and alleviate the negative consequences of the pandemic.”

The Minister blamed the global pandemic of COVID-19 as the reason for the present economic crisis Nigeria was battling with, though he said the nation “recorded positive economic developments in 2020.”

“The main reason for this (recession) is the COVID-19 pandemic. Nigeria is not alone. Dozens of countries, including economic giants like the US, the UK and Canada, have entered a recession, of course, due to the global pandemic.

“Others include Austria, Belgium, Denmark, Estonia, Finland, Hungary, Ireland, Italy, Latvia, Lithuania, Mexico, Netherlands, Norway, Romania, Russia and Spain,” he said.

But he said Nigeria’s economic recession has masked a lot of positive economic developments, relying on data from the National Bureau of Statistics (NBS), which said the 3.62 per cent decline in the GDP in Q3 was much smaller than the 6.10 per cent decline recorded in Q2.

According to him, “The economic conditions are actually improving, with 17 activities recording positive real growth in the third quarter, compared to 13 in Q2. Also, 36 of 46 economic activities did better in the third quarter of 2020 than in the second quarter of the same year.

“The 3.62 per cent contraction recorded in the third quarter of 2020 was better than the 6.01 per cent [decline] earlier forecast by the NBS and outperformed several domestic and international forecasts.”

“Please note that before COVID-19, the Nigerian economy had been experiencing sustained growth, which was improving every quarter, until the second quarter of 2020, when the impact of COVID-19 started to be felt. Just as the year 2020 was rounding off, the Nigerian Stock Exchange (NSE) was named the best-performing stock market among the 93 equity indexes being tracked by Bloomberg across the world,” he added.

Modupe Gbadeyanka

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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