Nigeria Would Fall Into Its Second Recession in Five Years If Drastic Action Were not Taken- Zainab Ahmed, finance minister,

In a sign of just how severely Nigeria’s economy has been affected by the coronavirus pandemic and the oil price crash, Africa’s biggest crude producer this week warned of an imminent recession, requested $7bn in emergency funding and ditched a costly oil subsidy scheme.  

 Although the country of 200m people had recorded a relatively modest 254 cases of coronavirus by Wednesday, with just six deaths, Zainab Ahmed, the finance minister, warned that Nigeria would fall into its second recession in five years if drastic action were not taken to cushion the economic blow. 

Ms Ahmed estimated this week that the economy could shrink as much as 3.4 per cent this year without a massive stimulus plan that includes billions in the central bank, the federal government and international support. 

For those that didn't understand the stuff, 1 barrel of oil is equivalent to 158.987 litres. Now 1 barrel is just $0.5. Which is equivalent to #195. Meaning 159litres of oil cost N195 only in the global market presently and oil is our major export. #OilCrash #OilPrice #CrudeOil

The warning came as the IMF began considering Nigeria’s emergency request for $3.4bn in funding, and the World Bank, from which the country has sought up to $2.5bn, released $82m to strengthen the country’s healthcare infrastructure. “We need to do things that are very radical, and very bold and very different and maybe even unusual so that we don’t slip into a recession,” Ms Ahmed told AriseTV. “Our economy is in crisis.” The Central Bank of Nigeria’s N1tn ($2.6bn) stimulus package amounts to just 0.7 per cent of 2019 gross domestic product, and the $3.4bn requested from the IMF is only 0.8 per cent of GDP, noted Yvonne Mhango, an economist for sub-Saharan Africa at Renaissance Capital. 

By contrast, many western economies have announced stimulus packages of 10 per cent of GDP or more. “As a percentage of GDP, the amounts are small . . . Nigeria, like most [of sub-Saharan Africa], doesn’t have the capacity to put forward a sizeable stimulus package,” said Ms Mhango, who has cut her GDP forecast for 2020 from 1 per cent growth to a 0.4 per cent contraction.