Nigeria’s Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed has noted that the country is poised for another economic recession in the 4th quarter of the year.
The minister who said this while speaking at a virtual consultative public forum in Abuja on Friday where she presented the Draft 2021-2023 Medium Term Expenditure Framework/Fiscal Strategy Paper, noted that findings showed that the country’s Gross Domestic Product (GDP) for the 2nd and 3rd quarters of 2020 were projected to be negative, which according to her, means that the country will go into a recession in Q4.
Ahmed emphasized that the country’s real GDP had been projected by the National Bureau of Statistics to contract by 4.2 per cent in 2020, as against the previous projected growth of 2.9 per cent.
She said, “Q2 and Q3 2020 GDP growth is projected to be negative, which means that the country will lapse into a second recession in four years.
The minister noted that crude price dropped from $72 per barrel in January to below $20 in April 2020, making the $57 crude oil benchmark of the 2020 budget unsustainable.
“The massive output cut by OPEC and its allies to stabilise global oil market, with Nigeria contributing about 300,000 barrels per day of production cuts, resulted in about 65 per cent decline in projected net 2020 government revenues,” the minister said.
According to her, the revenue reduction was from the oil and gas sector and had adverse consequences on foreign exchange inflows into the economy.
“Unless we achieve a very strong Q3 2020 economic performance, the Nigerian economy is likely to lapse into a second recession in four years, with significant adverse consequences,” Ahmed said.
Ahmed also stated that the Federal Government planned to spend N11.86 trillion in 2021, but that Nigeria is destined to uffer a deficit of N5.16tn because of the government’s projected ability to generate only N6.98tn revenue all in 2021.