Nigeria’s economy is improving despite recession – Lai Mohammed
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LAI Mohammed, the Minister of Information and Culture has said that the Nigerian economy is improving though the country is in recession.
Mohammed said this on Thursday when he featured on a breakfast programme, “Good Morning Nigeria” aired on the Nigeria Television Authority (NTA).
“By comparison, South Africa recorded a decline of -50 in 02 2020. The economic conditions are actually improving, with 17 activities recording positive real growth in the third quarter, compared to 13 in Q2. Also, 36 of 46 economic activities did better in Q3 2020 than Q2 2020, Mohammed said.
Mohammed stated that the decline of -3.62 percent in Q3 is much smaller than the -6.10 percent recorded in Q2.
According to the minister, the -3.62 percent contraction recorded in Q3 2020 was better than the -6.01 percent earlier forecast by the National Bureau of Statistics, adding that this outperformed several domestic and international forecasts.
He noted that before COVID-19, the Nigerian economy had been experiencing sustained growth that was improving every quarter until Q2 2020 when the impact of COVID-19 was felt.
Mohammed said the major reason for the economic downturn is the COVID-19 pandemic.
He argued that Nigeria is not alone as dozens of countries, including economic giants like the United States, United Kingdom, and Canada, had entered recession due to the global pandemic
The minister said other countries in recession include Austria, Belgium, Denmark, Estonia, Finland, Hungary, Ireland, Italy, Latvia, Lithuania, Mexico, Netherlands, Norway, Romania, Russia, and Spain.
He also said the oil sector was largely responsible for the slow-down in economic activity in Q3 2020.
The reason is the slow-down in global economic growth and oil demand due to COVID 19 pandemic as well as Nigeria’s obligations to meet OPEC cuts,” Mohammed stated.
The minister said although the non-oil sec also contracted in Q3 2020, the decline in the A sector by -2.51 percent year on year in Q3 was significantly better when compared to the contraction of -6.05 percent year on year recorded in Q2 2020.
He, however, said the latest recession would be short-lived and the country would return to positive growth “soon unlike the 2016 recession which lasted five quarters.”
Mohammed explained that the recession would be short-lived because of several complementary fiscals, real sector, and monetary interventions proactively introduced by the government
However, Mohammed did not specifically state how the country would exit the economic recession.
The ICIR had reported that Nigeria is officially in recession following a data report released by the National Bureau of Statistics (NBS).
According to the NBS, Nigeria’s economic growth contracted by -3.62 percent in the third quarter of 2020 recording a second consecutive quarterly Gross Development Product, GDP decline since the recession of 2016. The cumulative GDP for the first nine months of 2020 stood at -2.48 percent.
A civil society organization, the Socio-Economic Rights and Accountability Project (SERAP) in an open letter to President Muhammadu Buhari had demanded a cut in the cost of governance in order to exit the economic recession.
SERAP charged the government to implement bold transparency and accountability policy as a way of responding to the economic recession.
“This economic crisis provides an opportunity to prioritise access of poor and vulnerable Nigerians to basic socio-economic rights, and to genuinely re-commit to the fight against corruption. The country cannot afford to get back to business as usual,” the letter read in part.