Nigeria’s Current Recession Would Be Short-Lived – Zainab Ahmed

The Minster of Finance, Budget and National Planning, Mrs Zainab Ahmed has come out to say that Nigeria would exit the current recession lasted early next year.

She revealed this recently while speaking at he 26th Nigerian Economic Summit (NES#26) organised by the Nigerian Economic Summit Group.

According to her, the recession would be short-lived and should be over by the the first quarter of 2021.

She added that it is Nigeria’s second recession in five years, but it is nothing to be too worried about because recovery will be V-shaped.

Her words, “This would be a short-lived recession, and indeed by the fourth or, at worst, the first quarter of 2021, the country will exit recession.”

“Nigeria’s GDP declined by -3.62% (year-on-year) in real terms in the third quarter of 2020, following a much larger contraction of -6.10% in Q2 2020.

“Following the traditional definition, this second consecutive contraction in GDP means the Nigerian economy officially entered a recession at the end of Q3 2020, as the impacts of the COVID-19 pandemic, and the national response to contain its spread, manifested across several sectors of the economy.

“While the decline of -3.62% (for 2020 Q3) and -2.69 percent (for the first 9 months of 2020) are unfavourable, it was better than the -6.01% earlier forecast by the National Bureau of Statistics and outperformed outturns from several domestic and international forecasts. “Furthermore, this COVID-19 induced recession follows the pattern across the world where many countries have entered similar economic recessions.

“You will recall before the impact of COVID-19, the Nigerian economy had been experiencing sustained growth which was improving every quarter until Q2 2020 when the impacts of COVID-19 started to be felt.

“Other countries already in a recession like Nigeria include Austria, Belgium, Canada, Denmark, Estonia, Finland, Hungary, Ireland, Italy, Latvia, Lithuania, Mexico, Netherlands, Norway, Romania, Russia, Spain, UK, and the USA. “Most of these countries have recorded contractions much deeper than the Nigerian economy.

“It is also expected that South Africa that recorded a decline of over -50% in Q2 2020 compared to Nigeria of -6.10% will also enter a recession once its Q3 2020 results are announced.

“While the economy entered a recession in Q3 2020, the trend suggests this will be short-lived and by the end of the fourth quarter, we will return to positive growth.

“The exit from recession, it is anticipated, would be earlier than Q2 2021 forecast by the National Bureau of Statistics and some other domestic and international analysts. “You will recall that the 2016 recession lasted for 5 quarters but, if trends continue, the current recession should last just one quarter.

“Our expectations of a quick exit, which would be historically fast, is anchored on the several complementary fiscal, real sector and monetary interventions proactively introduced by the government to forestall a far worse decline of the economy, and alleviate the negative consequences of the pandemic.

“While there is always a lag between intervention and outcome, we can already see benefits on the economy as recorded in the better-than-expected results for Q3 2020.”