Nigeria’s economy likely to lapse into second recession in four years – Minister

The Minister of State for Finance, Budget and National Planning, Clement Agba, has said Nigeria might go into another recession in the Third Quarter of 2020.

The minister said this in Abuja on Thursday at the beginning of a five-day interactive session on the 2021-2023 Medium Term Expenditure Framework and Fiscal Strategy Paper.

Agba had read out a written presentation by the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, titled ‘Draft 2021-2023 MTEF/FSP: Presentation to the House Finance Committee.’

The minister said the Nigerian economy faced serious challenges in the first half of 2020 with the microeconomic environment signi?cantly disrupted by the pandemic.

“Nigeria is exposed to spikes in risk aversion in the global capital markets, which will put further pressure on the foreign exchange market as foreign portfolio investors exit the Nigerian market.

Nigeria’s Q2 GDP growth is in all likelihood negative, and 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 signi?cant adverse consequences.” The minister read.

While noting that there had been some improvement in Company Income Tax and VAT remittances, the minister said the Federal Government expected signi?cant improvements in VAT collections with the new VAT rate of 7.5 per cent.

The minister said, “Over the past five years, actual revenue performance averaged 61.4 per cent.

“Some of our reforms are yielding positive results, with significant improvements between 2018 and 2019. We believe we can do more to improve revenues, especially remittances from GOEs, possibly up to N1tn per annum.”

The event was organised by the House of Representatives’ Joint Committee on Finance; Appropriation; National Planning and Economic Development; and Aids, Loans and Debt Management.