CBN building

Nigeria’s apex bank, the Central Bank of Nigeria (CBN) has said the country’s Gross Domestic Product (GDP) will contract by 1.03 percent in the second quarter of 2020 and close the year at -0.16 percent.

This is milder than what the World Bank and the International Monetary Fund (IMF) project for the country for the year, both of which had projected that that the economy will contract by -3.0 percent and -5.4 percent respectively

“Staff projections suggest that, with a successful implementation of the Federal Government’s Economic Sustainability Plan, real output growth is expected to range between -0.39 percent and -0.16 percent in 2020, and between 0.7 percent and 1.48 percent in Q1 2021 depending on the level of oil price,” Mike Obadan, a member of the Monetary Policy Committee (MPC) the CBN wrote in his personal note to the June rate-setting committee meeting.

In his own remarks, Robert Asogwa outlined three key downside risks which have generally characterized Nigeria’s domestic economic outlook since the COVID-19 crisis.

“First, fiscal deficits have been widening as revenue declined because of the pandemic. Second, inflation rates have been sticky on the downwards side as supply disruptions affect prices of food and non-alcoholic beverages.

“Third, tightening balance of payments have been threatening the stock of foreign reserves thus creating pressures on exchange rates,” he wrote on his personal note to the MPC meeting.

Mahmoud Isa-Dutse, another member of the MPC said Nigeria’s goal of growth with equity should be pursued relentlessly by both the fiscal and monetary authorities to scale down the projected negative impact of the pandemic on the Nigerian economy.