The government, as a matter of policy and action, has been urged to diversify Nigeria’s economic structure away from primary products export and manufactured goods import, as well as deepen the value chain approach to agriculture if it must exit the current recession.
Besides, there is a need to tackle rising insecurity, which has continued to threaten peace and stability in the country. These were the submissions of experts who spoke in separate interviews with The Guardian on how the nation can speedily wriggle out of the present slump.
A recession is a period of a significant decline in activities across the economy characterized by low industrial production and manufacturing, high inflation, rising unemployment, falling purchasing power, low fiscal spending, as well as poor consumer spending, among others.
Specifically, the Director, Centre for Economic Policy Analysis and Research (CEPAR), University of Lagos, Prof. Ndubisi Nwokoma, said for Nigeria to rebound from this crisis and challenges, the government needs to frontally address the persisting challenges bedeviling the economy, ranging from insecurity, uncertainty, and poor budget management.
According to him, these challenges have continued to affect sectoral output in agriculture and manufacturing, thereby hampering economic growth. He also urged the government to consider opening the land borders, but with some conditions to avoid an influx of contraband and substandard products.
“Nigeria entering into another recession, the third one in history did not really come as a surprise. The signs were there all along with the negative GDP growth rate in the second quarter of 2020, and the subsequent poor economic performance that followed in the year.
“This was exacerbated by the lockdown effects of the COVID-19 pandemic. The implications for the economy are that the macroeconomic indicators may further worsen with fiscal sustainability becoming a serious challenge,” he said.
The Vice-Chairman of Highcap Securities, David Adonri, maintained that signs of weakness in the economy were apparent in Nigeria before the onset of COVID-19 in February 2020.
According to him, the widespread devastation of the pandemic of which the intensity surpassed the 2008 global financial crisis, only worsened the country’s steadily deteriorating economy. He said as a result of the nation’s fragility, early in January 2020, Moody’s & Fitch had downgraded Nigeria’s economy from stable to negative
“Nigeria’s GDP contracted by -3.36% and simultaneously, the Inflation rate rose to 13.75% in the third quarter (Q3) of 2020. That GDP growth rate is negative in Q3, heralding a recession is not surprising. IMF’s forecast for GDP growth rate at year-end is -5.4 percent.
“Inflation rate has risen in Nigeria for fourteen straight months, moving steadily from 11.02 percent in August 2019 to 14.23 percent in October 2020. It is expected to reach 15 percent in December 2020 according to the forecast made in the recent Nigeria Economic Sustainability Plan (NESP).”
Therefore, he suggested a reversal of Nigeria’s economic structure away from primary products export and manufactured goods import dependence. Additionally, he said the socio-political environment hampered by effects of population explosion, insecurity, lack of unity in diversity and pretentious federalism must be addressed to foster the social harmony necessary for peace and economic progress.
