COVID-19: Nigeria Economy Headed to Recession – Minister

The Minister of Finance, Budget and National Planning, Zainab Ahmed, has said the country’s economy could contract by -8.94% in 2020 as a result of the economic crisis caused by the Coronavirus pandemic.

Ahmed who gave the projection at the National Economic Council (NEC) Meeting presided over by Vice President Yemi Osinbajo said the contraction could be mitigated to -0.59% with the final stimulus plan the government is working on.

“On the economy, COVID-19 has resulted in the collapse in oil prices. This will impact negatively, and the impact has already started showing on the federation’s revenues and on the foreign exchange earnings. Net oil and gas revenue and influx to the federation account in the first quarter of 2020 amounted to N940.91billion. This represented a shortfall of N125. 52billion or 31% of the prorated amount that is supposed to have been realized by the end of that first quarter.

“40% of the population in Nigeria, today, are classified as poor. The crisis will only multiply this misery. The economic growth in Nigeria, that is the GDP, could in the worst case scenario, contract by as much as -8.94% in 2020. But in the best case, which is the case we are working on, it could be a contraction of -4.4%, if there is no fiscal stimulus.

“But with the fiscal stimulus plan that we are working on, this contraction can be mitigated and we might end up with a negative -0.59%”, she said.