Concerns Escalate As Nigeria Heads Into Recession Over COVID 19, Revenue Crisis

Related stories

Tinubu Departs Saint Lucia, Heads to Brazil for BRICS Summit

By Abiola Olawale President Bola Ahmed Tinubu departed Saint Lucia...

2027: Drama, Intrigues as Julius Abure Tells Otti to Quit Labour Party

By Abiola Olawale In a dramatic turn of events, Barrister...

FG Secures $100m for Lagos-Calabar Project from ECOWAS Bank

By Abiola Olawale The Nigerian government has reportedly secured a...

Ex- Arsenal Star Thomas Partey Faces Rape, Sexual Assault Charges in UK

By Abiola Olawale The Metropolitan Police have formally charged former...

Edwin Cortes: Prefers Being A Small Puerto Rican Than Big American

By Owei Lakemfa To be a citizen of the United...

*Oil Savings Dip to $72m from $325m in 6 Months

  • $1.5BN World Bank Financial Relief Being Sought, Says Minister

As global oil prices plunge occasioned by the COVID 19 pandemic continues to spawn a huge upset on Nigeria’s main source of income, creating large financing needs amidst  weakening national currency, Minister of Finance, Budget and National Planning, Zainab Ahmed has declared that the country is certainly heading into a recession.

She delivered this bombshell while addressing Nigeria’s highest economic advisory body, the National Economic Council, NEC on Thursday. “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. This will impact negatively, and the impact has already started showing on the federation’s revenues and on the foreign exchange earnings,” Ahmed told the council during meeting conducted via digital method.

Recall that the Nigerian economy is heavily dependent on crude oil earnings which, account for over 97 percent of export earnings and about 40 percent of government revenues.

Figures available to The New Diplomat reveal that Net oil and gas revenue and influx into the federation account in the first quarter of 2020 amounted to  about N940.91billion ($2.6b). This represented a shortfall of N125. 52billion or 31% of the prorated amount that is supposed to have been realized by the end of that first quarter.

Furthermore, as of November 2019, the country had $325 million in its oil savings account.  However, by May 21, 2020, less than six months after, the country has a paltry $72.04 million in its oil savings account. Ahmed  further disclosed that barring any stimulus package, Nigeria’s economy could shrink as much as 8.9% in 2020 in a worst-case scenario.

“The crisis will only multiply this misery. The economic growth in Nigeria, that is the Gross Domestic Product, GDP, could in the worst-case scenario, contract by as much as –8.94% in 2020. But in the best case, which is the case we are working on, it could be a contraction of –4.4%, if there is no fiscal stimulus. But with the fiscal stimulus plan that we are working on, this contraction can be mitigated and we might end up with a negative –0.59%”, she said.

Recall that the International Monetary Fund (IMF) had projected last month that the Nigerian economy would shrink by 3.4 percent this year, falling into its second recession in five years.

However, a World Bank director who took part in the meeting said the Bank was planning a package for immediate financial relief for Nigeria. Ahmed said the proposal was worth $1.5 billion and intended for Nigeria’s states to provide relief at the sub-national level. She said it could be disbursed by September.

 

By Babajide Okeowo (content Editor
By Babajide Okeowo (content Editorhttps://newdiplomatng.com/
With a career spanning over a decade spent across the Business, Political and Entertainment beats of prominent media organizations in Nigeria, Babajide Okeowo has carved a niche for himself as a Journalist of repute. As a newsroom guru, he has penned several weighty narratives and designed content that speak to a news medium's values, vision and mission while ensuring that the content resonate pretty well with a variety of critical audiences across Nigeria and beyond. A consummate storyteller whose coverage of the business industry is valuable, Okeowo is blessed with a vast analytical mind and data interpretation skills. In his spare time, he interprets data for a Leading American University while also volunteering for a Non-Governmental Organization on Mindset Transformation. Okeowo is the Content Editor of The New Diplomat.

Subscribe

- Never miss a story with notifications

- Gain full access to our premium content

- Browse free from up to 5 devices at once

Latest stories

NDN
Latest News
Tinubu Departs Saint Lucia, Heads to Brazil for BRICS Summit2027: Drama, Intrigues as Julius Abure Tells Otti to Quit Labour PartyFG Secures $100m for Lagos-Calabar Project from ECOWAS BankEx- Arsenal Star Thomas Partey Faces Rape, Sexual Assault Charges in UKEdwin Cortes: Prefers Being A Small Puerto Rican Than Big AmericanJune 12 And The International Pursuit of Justice For Abiola, By Femi FalanaBreaking Down the West’s $146 Billion 2024 Defence Technology InvestmentG7 vs. the World: GDP, Population, and Military StrengthUS drillers cut oil and gas rigs for 10th week in a row, Baker Hughes saysExclusive! Tinubu Tips Late Ajimobi's Wife, Florence, Others for Ambassadorial PostsTinubu Mourns, Pays Tribute to Legendary Super Eagles Goalkeeper Peter RufaiNatasha vs Akpabio: Court Orders Senate President To Recall Senator NatashaHadi Sirika Denies Defection to ADC Coalition Rumors, Reaffirms Loyalty to Buhari, APCChina Snubs U.S. Crude for Third Month, Even as Ethane Trade RestartsHow Super Eagles Icon Peter Rufai passed Away at 61
X whatsapp