- Two global emergencies may lead Nigeria to a deep economic recession, the World Bank has revealed
- The two emergencies are the ravaging coronavirus pandemic and the drop in the global oil prices
- The international financial institution, however, recommended five steps Nigeria should take to recover from the COVID-19 economic crisis
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The World Bank has revealed two key factors that may plunge Nigeria into a severe economic recession the worst since the 1980s.
The two key factors are the crash in global oil prices and the ravaging coronavirus pandemic, according to a report by Vanguard.
The newspaper reports that the World Bank in a statement titled Nigeria In Times of COVID-19: Laying Foundations for a Strong Recovery, estimated that Nigeria’s economy would likely contract by 3.2% in 2020.
Crash in oil price
Despite the economic diversification rhetorics by the government, oil still represents more than 80% of Nigeria’s exports and 50% of the overall government revenue.
Thus, as the oil prices dropped globally, the government revenue is expected to fall from an already low 8% of GDP in 2019 to a projected 5% in 2020.
Nigeria confirmed its index Covid-19 case late February 2020. Months after, the country now has 22,614 confirmed cases out of which 7,822 have recovered. Thus far, 549 have died from the virus complications.
The World report showed that the human cost of COVID-19 could be high while the shock was projected to push about five million more Nigerians into poverty in 2020.
“While before the pandemic, the number of poor Nigerians was expected to increase by about two million, largely due to population growth, the number would now increase by seven million, with a poverty rate projected to rise from 40.1% in 2019 to 42.5% in 2020," the bank said.
The bank reveals five steps Nigeria should take recover from the COVID-19 economic crisis. These are
1. Containing the outbreak and preparing for a more severe outbreak
2. Enhancing macroeconomic management to boost investor confidence;
3. Safeguarding and mobilizing revenues;
4. Reprioritizing public spending to protect critical development expenditures and stimulate economic activity
5. Protecting poor and vulnerable communities.
Meanwhile, the bank, however, said the Nigerian government had already taken some important measures to contain the outbreak and moderate the recessionary pressures.
Earlier, Legit.ng reported that the Federal Executive Council (FEC) had approved N2.3 trillion as a stimulus plan to support the Nigerian economy as the country continues to battle the novel coronavirus pandemic ravaging the global economy.
The funds were recommended by the Economic Sustainability Committee led by Vice President Yemi Osinbajo to ensure the country’s economy survives the impact of the pandemic.
Bashir Ahmad, a personal assistant to President Muhammadu Buhari on new media, disclosed this in a tweet on Wednesday, June 24.
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