Promoting Good Governance.

COVID-19: Recession may be inevitable if the pandemic continues for six months- Minister of Finance

MINISTER of finance, budget and national planning, Mrs Zainab Ahmed has said that the country can still close on a positive note for the year if the pandemic continues for an average of three months, but if it continues for six months and above then the country may go into recession.

She made this comment on a Channels TV program on Saturday.

As of February, the inflation rate went up to 12.2 per cent from 12.1 per cent in January, according to the National Bureau of Statistics (NBS)

The Central Bank of Nigeria (CBN) recently adjusted the exchange rate of the Naira at N380 to the dollar.

The CBN governor, Godwin Emefiele  said the new exchange rate at the Investors and Exporters (I&E) foreign exchange window was only an adjustment of the rate and not a devaluation.

Recall, the federal government approved a 10 billion Naira grant (about $27 million) to fight the spread of coronavirus, or COVID-19, in the country.

President Muhammadu Buhari said the money would be released to Lagos State, which has the highest number of coronavirus cases in the country.

And also the private sector led by Femi Otedola, Abdulsamad Rabiu, Herbert Wigwe, Segun Agbaje and Aliko Dangote contributed 1 billion Naira (about $2.7 million) each to support the government in curtailing COVID-19 in Nigeria.

According to the world bank, without significant structural policy reforms, Nigeria’s medium-term growth is projected to remain stable around 2 per cent.

Given that the economy is expected to grow more slowly than the population, living standards are expected to worsen.

Growth is constrained by a weak macroeconomic framework with high persistent inflation, multiple exchange rate windows and forex restrictions, distortionary activities by the CBN, and a lack of revenue-driven fiscal consolidation results.

The world bank showed that rising public debt and increasingly complex policy interventions by the CBN constrain private sector credit growth.

External balances are fragile to hot money movements, and fiscal buffers are exhausted, making Nigeria’s economy vulnerable to external risks, the world bank noted

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