Buhari warns of another recession looms in Nigeria with ‘negative consequences’

President Muhammadu Buhari has said Nigeria’s economy may relapse into a second recession in four years with significant negative consequences.

President Buhari made this assertion during the 2021 budget presentation to a joint session of the National Assembly on Thursday, October 8.

Gentechnews.com.ng learnt from the budget presentation, that the proposed expenditure is put at N13.08 trillion with crude oil the benchmark price of $40 per barrel and a daily oil production estimate of 1.86 million barrels, while the Budget has 12 key capital project sectors.

The budget also includes a N1.35 trillion spending by government-owned enterprises and grants and aid-funded expenditure of N354.85 billion.

The President said the 2021 budget was prepared amidst a challenging time for the global and domestic environments due to the COVID-19 pandemic; low oil prices and heightened global economic uncertainty.

The Nigerian economy, he said is currently facing serious challenges with the macroeconomic environment being significantly disrupted by the pandemic.

According to the National Bureau of Statistics, (NBS) real GDP growth declined by 6.1 per cent in the second quarter of 2020.

The President said: “This ended the three-year trend of positive, but modest, real GDP growth recorded since the second quarter of 2017. I am glad to note that, through our collective efforts, our economy performed relatively better than that of many other developed and emerging economies.

“GDP growth is projected to be negative in the third quarter of this year. As such, our economy may lapse into the second recession in four years, with significant adverse consequences.

“However, we are working assiduously to ensure rapid recovery in 2021. We remain committed to implementing programmes to lift 100 million Nigerians out of poverty over the next 10 years.”

Buhari noted that the government is banking on it’s over N3 trillion economic stimulus plan to reduce the impact of that recession.

A report by the National Bureau of Statistics, Nigeria (NBS) recently claimed that in August, Nigeria’s economy witnessed the biggest decline in 10 years.

Bureau of Statistics explained that the economy contracted by 6.10 per cent in the second quarter of 2020 from 5.06 per cent in the first quarter and 5.15 per cent in the second of 2019.

It was gathered that an economy will be in a recession when its size falls for two consecutive quarters, which is six months and Nigerian economy suffered its last recession in 2016.