The pandemic which is currently ravaging almost all countries of the world including Nigeria is causing more harm than expected. The challenges this pandemic has thrown to various nation of the world is not limited to the health sector alone but transcends to other sectors due to the transmission mechanism that makes this whole thing ravage round each sector. Little wonder, the Minister of Finance, Budget and National Planning, Zainab Ahmed, disclosed that the Nigerian economy is expected to record a negative growth as the nation is heading towards an economic recession.
She factored in the COVID-19 pandemic and the crash in oil prices as reasons for the recession prediction. The transmission mechanism of Covid-19 pandemic to other sectors of the economy is evidenced with effects on the transportation sector where little profits are made especially in the aviation industry, the manufacturing sector where there is an increase in demand amidst low supply, the entertainment industry is not left out with records of little or no events to bring in income and many other sector that had led to a decline in the government’s revenue. With a slowdown in economic activities, the prediction of a recession shouldn’t be of a big surprise
Also, Nigeria’s dependence on the revenue generated by oil is seen to cause harm to the nation during this period. The recent oil price crash in oil prices greatly affected Nigeria’s income as this was the first time oil traded at a negative price and as such has affected the nation’s revenue and foreign exchange earnings. According to the finance minister “Net oil and gas revenue input to the federation account in the first quarter of 2020 amounted to N940.91 billion, this represents a shortfall of N125.52 billion”, Although the oil price crash was caused by an oil glut but it can still be traced to the impacts of the Covid-19 pandemic.
With a prediction of negative growth and a recession, Nigerians, especially business owners are more concerned as to how much impact it will have in order to start preparing on how to reduce its impact on their business. The Finance minister too is not slacking off as she explained that efforts are been made to reduce its impact on the economy. During her press brief, she clearly stated that recession would definitely take place, however, they are trying their possible best to cushion its effects.
According to her, “The National Bureau of Statistics (NBS) has made an assessment So, it is the NBS assessment that Nigeria will go into a recession measuring at an average of -4.4%. but with the work that the Economic Accessibility Committee is doing bringing stimulus packages, we believe that we can reduce the impact of this recession”
“And if we applied all that have been proposed and we are able to implement it, we may end up with a recession that is -0.4%. 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”, the finance minister said.