Why Nigerians seem unperturbed by Recession

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By Aiyeku Timothy

Nigeria was confirmed to have entered the second recession in five years on Saturday after figures by the National Bureau of Statistics (NBS) said Nigeria’s economy had contracted by -2.48%.

According to NBS, the current recession is Nigeria’s worst in decades and could impact more on the lives of the masses.

However, the current recession has been predicted by the World Bank earlier in June while reacting to the collapse in oil prices as a result of the COVID-19 pandemic. The World Bank Nigeria Development Update stated that the recession would be the worst since the 1980s.

The report, “Nigeria In Times of COVID-19: Laying Foundations for a Strong Recovery,” estimates that Nigeria’s economy would likely contract by 3.2% in 2020. This projection assumes that the spread of COVID-19 in Nigeria is contained by the third quarter of 2020. If the spread of the virus becomes more severe, the economy could contract further.

It would be recalled that in August 2016, Nigeria had her first experience of economic recession under the current administration after figures released by the National Bureau of Statistics officially confirmed it. The statistics bureau said the second quarter 2016 Gross Domestic Product (GDP) declined by -2.06 per cent while annual inflation rose to 17.1 percent in July from 16.5 percent in June, and food inflation rose to 15.8 percent from 15.3.

“The pace of the increase in the headline index was however weighed upon by a slower increase in three divisions, namely health, transport, and recreation and culture divisions,” the NBS had said.

It took almost a year for Nigeria to exit the first recession as the NBS made the official declaration in September 2017 that the country’s economy grew by 0.55 percent in GDP terms for Q2 2017.

Should Nigerians care about the declaration by the Federal Government when already, life has been most difficult with unimaginable inflation rates and lack of jobs? That is yet to happen.

There seem to be a level of calmness on the part of Nigerians as efforts are geared towards survival without any concern, facing the government, as against the first pronouncement that led to different reactions and fears.

The body language of Nigerians is not unlikely to be connected to the perception of the masses about the government as they expect very little of positives coming from the current administration.

The Managing Director of the Financial Derivatives Company Limited, Mr. Bismarck Rewane, in his reaction, stated that policymakers in the country should “accept the truth that we are in a recession” hinting that Nigerians have been living in it even before the pronouncement.

Lending his voice to This Day, political economist, Pat Utomi, said, “The first thing any leadership that finds itself in the present economic situation needs to do is to, “bring everybody into the house so that they can be going in same direction. Right now, majority of Nigerians are outside the house, presuming the country to be in a tyranny.’

Nevertheless, the Federal Government, through the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, expressed confidence that the country will exit recession in the first quarter of 2021.

She made this claim at the 26th Nigerian Economic Summit organised by the Nigerian Economic Summit Group and the Federal Ministry of Finance, Budget, and National Planning, on Monday, 23 November in Abuja.

While noting that the COVID-19 pandemic was to blame for the current recession in Nigeria, the Minister added that Nigeria is not alone in this as other countries had entered economic recession as well.

Her words, “Nigeria is not alone in this, but I will say that Nigeria has outperformed all of these economies in terms of the record of a negative growth,” Ahmed said.

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