Data released by the National Bureau of Statistics (NBS) on Monday showed a shrink in Nigeria\u2019s Gross Domestic Product (GDP) by -6.10% year-on-year.\u00a0 This is ominous for the economy. One more quarter of a shrink and the country will descend officially into recession. This is an expected trajectory and has set Nigeria on a worrying negative path. Although most economies around the world have taken a hit from the ravaging impact of the global coronavirus pandemic, there are concerns that Nigeria\u2019s economic crisis could be on a long path of uncertainty. Global economic crisis has slowed and severely reduced crude oil production and export, around which Nigeria\u2019s economy revolves. Government\u2019s claim to implementing a policy of diversification of the economy has fallen flat without any evidence of success. <\/p>\n\n\n\n
Massive debts have piled up, including loans from the\nChinese and other creditors. The cost of servicing these loans are massive and\nit would appear that the country has no money to see it through the crisis. The\npromise by the International Monetary Fund (IMF) to make available a loan of\n$3.4 billion is encountering stumbling blocks. The IMF had listed conditionalities\nthat Nigeria must fulfil to enable it access the loan. The conditionalities\ninclude the Nigerian Government scrapping multiple exchange rates used for its\nfinancial dealings which has bred corruption; removal of subsidy on petroleum\nproducts and reform of the oil sector, including passage of a Petroleum\nIndustry Bill (PIB). Nigeria claims it has removed subsidy. Yet the State-owned\nNigeria National Petroleum Corporation (NNPC) continues to be the sole importer\nof petroleum products into the country, with prices set by it in a manner that\nis not transparent. The government\u2019s half-hearted attempts to unify the\nexchange rates has seen currency values tumble by nearly 30 per cent. <\/p>\n\n\n\n
The NBS report of a decline in Nigeria\u2019s GDP may not have\ncome as a surprise to many. Nigeria had since begun to experience an economic\ndownturn in 2019. However, this was compounded by the COVID-19 pandemic and the\nimplementation of a nationwide lockdown, which meant that many commercial\nactivities were halted or drastically minimised. The Nigerian economy has been\ngrowing at a slow pace since its last recession in 2016 but has just witnessed\nits biggest contraction four years later, owing to the pandemic. <\/p>\n\n\n\n
Nigerians worry over what appears to be the absence of a\nconcrete strategy to boost economic growth, especially in the midst of the\npandemic, considering that prior to COVID-19, government policies were not\ncreating tangible positive economic impact. The country continues to service\ndebts with a chunk of its revenue, while seeking to generate revenue by placing\nadditional levies and tax burdens on citizens. The extent of the impact of an\nimpending recession is dependent on the response of the Nigerian Government. On\nthe streets, citizens are groaning in pain. Unemployment levels have reached 40\nper cent, as enterprises that were already suffering from the impact of the\nhostile business environment in the country were forced out of business or\nconstrained to lay off workers following the incidence of the pandemic. <\/p>\n","protected":false},"excerpt":{"rendered":"
Data released by the National Bureau of Statistics (NBS) on Monday showed a shrink in Nigeria\u2019s Gross Domestic Product (GDP) by -6.10% year-on-year.\u00a0 This is ominous for the economy. One more quarter of a shrink and the country will descend officially into recession. This is an expected trajectory and has set Nigeria on a worrying […]<\/p>\n","protected":false},"author":2,"featured_media":1665,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[131],"class_list":["post-1657","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-economic-crisis-looms-in-nigeria"],"_links":{"self":[{"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/posts\/1657","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/comments?post=1657"}],"version-history":[{"count":1,"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/posts\/1657\/revisions"}],"predecessor-version":[{"id":1666,"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/posts\/1657\/revisions\/1666"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/media\/1665"}],"wp:attachment":[{"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/media?parent=1657"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/categories?post=1657"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/tags?post=1657"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}