By Ibrahim Apekhade Yusuf
Economists and financial experts believe the latest report by the National Bureau of Statistics (NBS) does not bode well for the economy.
The report released on Saturday confirmed Nigeria was in its worst recession in 33 years.
A recession is a period of decline in general economic activity, typically defined when an economy experiences a decrease in its gross domestic product for two consecutive quarters.
The last time Nigeria had this magnitude of economic decline was under the regime of Ibrahim Babangida, when the economy recorded consecutive declines of 0.51 per cent and 0.82 per cent in the first and second quarters of 1987.
Speaking with a cross-section of experts at the weekend, they said the latest negative outlook on the economy while not surprising could be managed ultimately.
Ken Ukaoha, president of the National Association of Nigerian Traders (NANTS) says ominous signs showed clearly the direction of the economy.
“The indices already showed that we are heading into a recession with the kind of inflation that was skyrocketing. Naturally, the impact of this latest recession is bound to be enormous, especially on the cost of food that has already gone high, rise in cost of transportation due to increase in the cost of fuel and other related indices such as low purchasing power.”
Echoing similar sentiments, Dr Titus Okunrounmu, a former director, Budgetary Department of Central Bank of Nigeria lamented that it was anybody’s guess that with the closure of land and sea borders before and after the COVID-19 pandemic, import and export businesses suffered and thus had a ripple negative effect on the economy.
Besides, Okunrounmu argues that with the 2020 budget running at a deficit it was obvious the economy would take a dangerous dive into recession in no time.
Road to recovery
Expectedly, analysts continue to dimension the recovery pattern for the Nigerian economy in 2021, with reputable outlets forecasting a slow recovery pattern on the back of a possible second wave of COVID-19 pandemic currently distorting the economic landscape in developed economies.
Director-General of the Lagos Chamber of Commerce and Industry (LCCI), Dr. Muda Yusuf, argues that to facilitate quick recovery, the country needs to restore normalcy to the foreign exchange market by broadening the scope of market expression in the allocation mechanism just as he hopes the ports system, especially the key institutions in the international trade processes need to be more investment friendly as trade is critical to recovery.
Okunrounmu says one way to revitalise the economy is to focus on agribusiness. “Nobody is stopping us from investing in agriculture. We can even borrow money to develop our agriculture. Once food security is guaranteed, things will gradually fall in place.”