BY: Moses olajuwon Obajemu
Nigeria may enter another recession in the third quarter of 2020, according to Clement Agba, minister of state for finance, budget, and national planning.
If it happens, it will be the second time in four years that the country will be in recession, having gone into recession in 2016.
The government said the COVID-19 pandemic resulting in the crash of global oil prices among other economic factors had adversely affected the nation’s economy, with the gross domestic product growth for Q2 most likely to be negative.
Agba said this in Abuja on Thursday at the beginning of a five-day interactive session on the 2021-2023 medium-term expenditure framework and fiscal strategy paper.
The event was organised by the House of Representatives’ joint committee on finance, appropriation; national planning and economic development; and aids, loans and debt management.
The World Bank had in July warned that the collapse in oil prices resulting from the COVID-19 pandemic was expected to plunge the Nigerian economy into a severe economic recession, the worst since the 1980s.
The global bank had stated this in its latest Nigeria Development Update.
Agba had read out a written presentation by the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, titled ‘Draft 2021-2023 MTEF/FSP: Presentation to the House Finance Committee.’
The minister said the Nigerian economy faced serious challenges in the first half of 2020 with the microeconomic environment signiﬁcantly disrupted by the pandemic.
The document partly read, “The impact of these developments is about 65 per cent decline in projected net 2020 government revenues from the oil and gas sector, with adverse consequences for foreign exchange inﬂows into the economy.
“Nigeria is exposed to spikes in risk aversion in the global capital markets, which will put further pressure on the foreign exchange market as foreign portfolio investors exit the Nigerian market.
“Nigeria’s Q2 GDP growth is in all likelihood negative, and unless we achieve a very strong Q3 2020 economic performance, the Nigerian economy is likely to lapse into a second recession in four years, with signiﬁcant adverse consequences.