After the National Economic Coucil’s (NEC) first virtual meeting in Abuja, yesterday, the minister of Finance, Budget and National Planning, Zainab Ahmed, said that it was clear from all economic indicators that Nigeria would go into recession.
It, however, assured the citizens that tested measures and strategies had been put in place to ensure the country’s early exit from the crisis.
Ahmed told State House correspondents that the meeting which was presided over by Vice President Yemi Osinbajo at the Presidential Villa had worked out modalities to ensure that the situation was salvaged early enough by the government.
Chaired by the vice president, NEC comprises all the 36 state governors, the FCT minister, fiancé minister, the Central Bank of Nigeria (CBN) governor and other top officials of the federal government.
According to Ahmed, the global economy was facing the sharpest reversals since the Great Depression and this had both health as well as economic consequences.
She noted that COVID-19 had resulted in the collapse of oil prices, stressing that this would impact negatively on the federation’s revenues and foreign exchange earnings.
The minister explained that the economic growth in Nigeria, that is the GDP, could in the worst case scenario, contract by as much as –8.94% in 2020.
She said: “In the best case, which is the case we are working on, it could be a contraction of –4.4 per cent, 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 per cent.
“The National Bureau of Statistics (NBS) has made an assessment that Nigeria will go into a recession measuring at an average of -4.4 per cent.
“But with the work that the Economic Sustainability Committee is doing, bringing stimulus packages, we believe that we can reduce the impact of that recession. And if we applied all that have been proposed and we are able to implement them, we may end up with a recession that is -0.4 per cent.
“In any case, we will go into recession but what we are trying to do is to make sure that it is shallow so that we will quickly come out of it come 2021, “ she explained.
On the risks of reopening the economy, she said that “this is a very difficult time because the challenges we have now are double. There is health challenge, there is an economic challenge.
“Even as we are addressed the current health challenge, we still have to look at how we can support the economy so that it does not fall into a depression,” the minister declared.
She further said that “we have to feed the people and you can only feed the people if they go out and farm. We are a very large population, we don’t want to take the risk and we don’t have enough funds to cushion the effect.
“We have seen globally countries opening up gradually. We have done two weeks circle of partial opening and we are in another two weeks; that is a process of learning. There is a regulation for a requirement to wear a mask, there is still an encouragement for everybody to practice social distancing and all of us have to be responsible and own this process.
“But it is possible for us to stay permanently locked up and expect to address only the health crisis because even as we addressed the health crisis, other crises are springing up, other health conditions (like you have said) immunisations are not being addressed.
“ So, we are having a complex situation, we don’t have to open up every sector but we are going to open in a manner that is responsible to make sure that as much as possible the health risk is mitigated,” she stated