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April 16, 20204min1030

Nigeria: Worse recession looms as IMF, FINTEL earn of mass unrest

The International Monetary Fund has given gloomy prognostication into the Nigerian Economy saying  it could be heading for its worst recession in three decades.

Nigeria like most part of the world has been gripped by the effects of the Coronavirus pandemic.

According to the IMF, Nigeria’s economy will drop by 3.4 per cent in 2020 as a result of the COVID-19 pandemic.

The international organisation made the projection in its April 2020 World Economic Outlook report released on Tuesday in Washington, United States.

IMF Chief Economist and Director of Research Department, Gita Gopinath, said, “For the first time since the Great Depression, both the advanced economies and emerging and developing economies are in a recession.

“For 2020, growth in advanced economies is projected at -6 per cent. Emerging markets and developing economies which typically have normal growth levels well above advanced economies are also projected to have negative growth of -1 per cent and -2.2 per cent if you exclude China.”

The Nigerian economy is however, projected to bounce back by 2.4 per cent in 2021 but that’s would be predicated on factors most likely out of Nigeria’s reach.

Rise in prices of oil, Nigeria’s premium commodity, alongside efficient implementation of reforms could guarantee the growth but not a certainty.

How the reservoir the world reacts to their fair share of coronavirus effects would equally affect Nigeria.

Consequently both IMF and Financial Intelligent report group say it could spark unrest never seen in the country.

Executive Director of FINTEL, David Emi on Wednesday in Abuja said, “The country already has a weak government, what appears to be a vacuum. Poor or lack of economic management team, excessive borrowing, clannish distribution of palliative, insecurity and rising cases of terrorism.

“These are dangerous things to experience when your economy is almost certain to hit the rock. If key basic needs can not be guaranteed, it could spark unprecedented unrest and set chains of events across the country.

“Nigeria needs to buckle up and prepare for this dark reality. And this bad time was trusted on itself because for five years the administration has done nothing. Growth has been in no existence while borrowing has been excessive,” he said.

He added that, “Borrowing too has even been for consumption not investment. In sub Saharan Africa, Nigeria is the only country that has not opened up any part of her economy in the last six years. This shows lacked ideas.

Daily Mail reports that FINTEL, a group of financial experts that study and present data concerning economies of countries added that, if the prices of oil edge up, Nigeria could see a different outlook if it is properly managed.

“It’s one thing for oil prices to zoom up, it’s another thing to have the positive effects based on proper management and skill in applying resources in key area.

“At the moments, Nigeria is not doing enough and this could spell doom.”


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