Nigeria may not wriggle out of recession in first quarter of this year – says expert
Johnson Chukwu, an economic/ financial expert, has said that Nigeria cannot wriggle out of the present recession in the first quarter of this year, as earlier promised Nigerians by Zainab Ahmed, minister of Finance and Economic Planning. But rather the economy will rebound in the second quarter.
He rather advised the government to make the appropriate policy choices needed to pull the nation’s economy out of recession.
Chukwu, who is the chairman of Virgin Forest Energy; chairman of Fidelity Pensions Managers Ltd; chairman, Standard Alliance Insurance Plc, founder and managing director, Cowry Asset Management Ltd, spoke to a cross section of journalists in his Ugwueke country home in Bende LGA of Abia State.
“The promise by the Minister of Finance and Economic Planning is an ambitious statement. Our economy has contracted. It may be difficult for the economy to rebounce in the first quarter; but by the second quarter, it may rebound,” he said.
He however said that if Nigeria’s economy must come out of recession as fast as expected, Nigerians should expect a “V-shaped Curve,” where an economy goes into recession and comes out quickly.
Chukwu who was reacting to the statement credited to the Federal Government that Nigeria will exit recession by the first quarter of year 2021, said: “It is a possibility but I think it is an ambitious statement.”
His words: “If you look at the growth of the Nigerian economy since the beginning of last year, you will observe that the first quarter of year 2020, when Coronavirus has not hit the economy, the economy grew only by 1.87 percent. In the second quarter, as a result of the COVID-19 lockdown and the global economic crisis, the economy contracted by 6.1 percent; and in the third quarter of last year, the economy contracted by 3.62 percent. It is feasible that the economy will still contract in the first quarter, as we may also observe that several economies are just reopening.
“I want to believe that it may be difficult for the economy to rebounce in the first quarter, but hopefully by the time we get to the second quarter, we should see an economic recovery. We should see a positive growth. We should expect a low growth in 2021, just like we have seen in the previous years. For the past four years, since the economy went into recession in 2016, the economy has been growing at a very slow rate.
“If you recall, the economy contracted by 1.58 percent in 2016, only to grow by 0.82 percent in 2017; and grew by 1.91 percent in 2018 and 2.27 percent in 2019. So, in 2020, we expected the contraction, that is, the economy is in recession. But in 2021 towards the second and third quarter, we should see a positive growth but a very low growth that will still be below our population growth by about 3 percent.”
The financial expert, who also opined that for the nation’s economy to come out of recession as fast as expected, Nigerians should expect a “V-shaped Curve,” however, insisted that policy choices remained the remedy to economic recession.
Chukwu said that, “In the year 1929 to 1933, the US went into economic depression.