Nigeria May Fall Back Into Second Recession After Four Years – Buhari
President Muhammadu Buhari has said Nigeria’s economy may relapse into a second recession in four years with significant negative consequences.
The Nigerian economy suffered its last recession in 2016.
He said this during the budget presentation to the Joint Session of the National Assembly on Thursday.
The proposed budget is calculated at N13.08 trillion, with a crude oil benchmark price of $40 per barrel and a daily oil production estimate of 1.86 million barrels.
The budget includes spending of N1.35 trillion by government-owned companies and grants and aid-funded spending of N354.85 billion.
In his address, the President said that the 2021 budget was planned in the face of a daunting global and domestic climate owing to the COVID-19 pandemic, low oil prices and heightened global economic instability.
The Nigerian economy is currently facing major problems, he added, with the macroeconomic environment seriously affected by the pandemic.
Real GDP growth declined by 6.1 percent in the second quarter of 2020, according to the National Bureau of Statistics.
“This ended the three-year trend of positive, but modest, real GDP growth recorded since the second quarter of 2017. I am glad to note that, through our collective efforts, our economy performed relatively better than that of many other developed and emerging economies,” Mr Buhari said.
“GDP growth is projected to be negative in the third quarter of this year. As such, our economy may lapse into the second recession in four years, with significant adverse consequences.
President Buhari, however, announced that the government has put in place plans to ensure rapid recovery in 2021.
According to the President, the plans to revive the economy include a focus on skills development exemplified by the Special Public Works programme which aims to provide employment opportunities to 774,000 young people across the country.
“However, we are working assiduously to ensure rapid recovery in 2021. We remain committed to implementing programmes to lift 100 million Nigerians out of poverty over the next 10 years,” he said.
The government is counting on its over N3 trillion economic stimulus plan to reduce the impact of that recession.
In August, Nigeria’s economy witnessed it’s biggest decline in 10 years, according to a report by the NBS.
The economy contracted by 6.10 per cent in the second quarter of 2020 from 5.06 per cent in the first quarter and 5.15 per cent in the second of 2019.
An economy is said to be in a recession when its size falls for two consecutive quarters, that is six months.