Financial analysts on Monday offered advice to the government on ways to boost the economy, which has slipped into recession.
The National Bureau of Statistics (NBS) had, in its Gross Domestic Product (GDP) report for Q3’ 2020, said that the country recorded GDP growth of -3.62 per cent in the quarter.
It was an improvement from the -6.10 per cent growth recorded in Q2’2020, but the two consecutive quarters of negative GDP growth put the economy in recession.
Analysts who spoke in separate interviews with News Agency of Nigeria in Lagos said that the recession was expected.
They, however, advised the authorities on measures they needed to take to change the situation.
Alhaji Aminu Gwadabe, President, Association of Bureau De Change Operators of Nigeria, said that it was not surprising that Nigeria entered into another recession.
“It was expected for the country to go into a recession on the onset of the coronavirus pandemic; though very worrisome considering our monocultural economy, comatose infrastructure and food insecurity.
“The pandemic has caused a global recession, and leaving unprepared countries like Nigeria very vulnerable to it”, he said.
He urged government and policy makers to urgently dedicate resources to boost productive capacity, youth empowerment and come up with programs that would alleviate poverty in rural areas.
According to him, Nigeria’s economy is presently bedevilled with high inflation rate, volatile exchange rate, insecurity, tense political environment that are preludes to another round of recession, if not carefully and properly managed.
Prof. Ndubisi Nwokoma, Director, Centre for Economic Policy Analysis and Research, University of Lagos, also concurred.
“Nigeria entering into another recession, the third one in its history, did not really come as a surprise.
“The signs were there all along with the negative GDP growth rate in the second quarter of 2020 and consequent poor economic performance that followed.
“This was exacerbated by the lockdown effects of the COVID-19 pandemic.
“The negative growth rate of the third quarter simply put the “nail on the coffin”, he said.
Nwokoma advised government to frontally address the persisting challenges of the economy – insecurity, uncertainty and poor budget management.
According to him, these challenges affect sectoral output in agriculture and manufacturing and truncate growth.
He also urged government to consider opening the land borders under some conditions.
The Chief Executive Officer, BIC Consultancy Services, Dr Boniface Chizea, also said the recession was not unexpected.
“The Nigerian economy had really not fully recovered from the last recession which it went into in the second quarter of 2016, after the economy had been out of recession for a record period of about 25 years.
“On paper we speedily got out of that recession after five quarters in 2017 but the growth rate had been marginally and nationally positive, hardly recording above two per cent in the intervening period before the onset of the pandemic by the end of the first quarter in 2020.
“The growth rate must equal three per cent; the estimated rate of population growth, before any impacts could be felt.
“With the onset of the pandemic and the resultant supply chain disruptions, it was a known and felt fact that we went immediately into recession while awaiting confirmation by National Office of Statistics”, he said.
Chizea advised government to be focused on fighting recession by continuing to implement its many plans, particularly the Economic Sustainability Plan.
Economic recession is defined as two consecutive quarters of negative GDP growth.