The Federal Government (FG) on Friday, July 10, revealed that the country is heading for another recession in the fourth quarter of this year.
According to the FG, findings showed that the country’s Gross Domestic Product for the second and third quarters of 2020 was projected to be negative.
This, it said, implied that the country would slide into a second recession in four years.
According to a statement issued by the Minister of Finance, Budget and National Planning, Zainab Ahmed; the country’s real GDP had been projected by the National Bureau of Statistics to contract by 4.2 per cent in 2020, as against the previously projected growth of 2.9 per cent.
“Q2 and Q3 2020 GDP growth is projected to be negative, which means that the country will lapse into a second recession in four years,” she said.
She also revealed that the Federal Government’s earnings dropped by about 65 per cent following the cuts in oil production.
Ahmed spoke during a virtual consultative public forum in Abuja; where she presented the Draft 2021-2023 Medium Term Expenditure Framework/Fiscal Strategy Paper.
She noted that the FG acknowledged that the economy faced serious challenges in the first half of the year; as the macroeconomic environment was significantly disrupted by COVID-19.
“The massive output cut by OPEC and its allies to stabilise the global oil market; with Nigeria contributing about 300,000 barrels per day of production cuts; resulted in about 65 per cent decline in projected net 2020 government revenues,” the minister said.
She said the revenue reduction was from the oil and gas sector; and had adverse consequences on foreign exchange inflows into the economy.
“Unless we achieve a very strong Q3 2020 economic performance; the Nigerian economy is likely to lapse into a second recession in four years; with significant adverse consequences,” Ahmed said.
Ahmed also stated that the Federal Government planned to spend N11.86tn in 2021.
According to her, Nigeria’s monetary fortunes would suffer a deficit of N5.16tn because of the government’s projected ability to generate only N6.98tn revenue all in 2021.