Africa’s largest economy stands a chance of shrinking next quarter from the shocks of curbs placed on commercial operations in an effort to rein in coronavirus spread, the Nigeria Employers’ Consultative Association (NECA) has warned.
Timothy Olawale, the Director-General of the association, in a statement on Monday emphasised the economic imperative of deploying transformative strategies that will enable monetary and fiscal authorities to restore the economy to sound footing.
“We anticipate contraction in the second quarter, as the economy witnessed a six-week lockdown on the commercial nerves of the country.
“Similar trend was witnessed in the global economy, except China, whose consumption of fuel due to opening of industrial hubs and transportation could portend mild positive growth pattern due to demand for crude oil.
“There is the need for the fiscal and monetary authorities to develop a more aggressive and decisive policies to sustain an economic recovery in the wake of further low oil prices,” the statement said.
NECA’s optimism demonstrates that offering lifeline to vulnerable economic sectors will turn around Nigeria’s fortune and aid the potential reversal of the economy into recession.
“We believe that more coordinated stimulus packages targeted at the worst-hit sectors of the economy would sustain the economy from experiencing contraction of 8.9 per cent as predicted.”
Nigeria faces a dim prospect of revenue crunch like other oil-producing countries as the world grapples with a record oil crash induced by market glut and the depressed demand for fuel coming in the wake of imposition of movement restrictions and coronavirus lockdowns.
“The lockdown of the Nigerian economy commenced in April due to the pandemic. Therefore, the real impact of COVID-19 on the economy would be felt in the Q2 GDP result,” Mr Olawale said.