Nduka Chiejina (Assistant Editor)
As Nigeria entres her second recession in five years, the National Assembly has been urged to quickly pass the 2021 budget to hasten the country’s economic recovery.
Professor Uche Uwaleke of the Nasarawa State University told The Nation that “the early passage of the 2021 appropriation Bill will go a long way in supporting economic recovery.”
Reacting to the news of Nigeria sliding into recession, Don stated that “the performance of the Agricultural sector in real terms which came in at 1.39% was disappointing.”
This he said, “corroborates the high food inflation rate now above 17% caused in large part by insecurity in many parts of the country”.
However, he sees “a quick V-shaped recovery as the effect of COVID’19 recedes and the impact of the interventions by the government and CBN begin to manifest including the implementation of the Economic Sustainability Plan.”
He noted that the third-quarter GDP figures released by the National Bureau of Statistics (NBS) “is a confirmation of the fact that in terms of economic contraction occasioned by COVID’19, Q2 2020 represents the worst experience for Nigeria.”
Professor Uwaleke however believes that things could have been worse In Q2 of 2020 but for the government’s responses like “the ease in lockdowns and movement restrictions, the reduction in the cases of COVID’19 and the gradual return of investors confidence in the economy.”
These improved measures by the government he said have resulted in investor confidence which has manifested “in PMI readings and stock market performance.”
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According to the Professor “, this explains why, although still in the negative territory, sectors like Manufacturing, Trade, Transportation, and Education recorded improvements over the Q2 numbers.”
On his part, visiting Professor at the Centre for the Study of Leadership and Complex Military Operations, Nigeria Defence Academy (NDA) Prof. Ken Ife said he is “not surprised that Nigeria slipped into recession both as the aftermath of the lockdown and as part of the ongoing macroeconomic headwinds”.
According to Prof Ken Ife, “the unusual type of recession we dropped into, stagflation, is one where, rather than the economy experiencing low inflation, low-interest rates, with expansionary policies, we are just seeing the opposite in galloping inflation, high-interest rates, and fiscal and monetary policy challenges despite quantitative domestic finance interventions.”
Expressing optimism, Prof Ife stated that “at a contraction of -3.62%, there is a likelihood we might jump out of recession in the 4th Qtr of 2020, but certainly, in the 1st Qtr of 2021, all things being equal.”
“Whilst the oil GDP growth rate went deeper into the red at -13.89% and with a reduced contribution to GDP, non-oil sector outperformed by returning a marginal decline in the non-oil GDP growth rate of -2.51%,” he said.
The nonoil sector performance he noted “was boosted by the positive growth of 18 sectors compared to 13 sectors in Qtr2.”