Nigeria’s economic team has its task set out clear in preparing the economy for a stronger recovery process post COVID-19 and Steering the economy away from an imminent recession.
Economic watchers project a best case scenario of a V-shaped recovery which will be characterised by a quick and sustained recovery only if government moves at a fast pace with economic adjustments and stabilising macroeconomic indices that largely affect output despite a projected contraction of about 3-3.5% .
For now, the first quarter Gross domestic product report earlier released calms the mood with a GDP growth of 1.87% year on year which saw the oil sector posting a growth of 5.06% while the non oil sector grew by 1.55% in real terms compared to 2019 figures.
This isnt enough as a dip is expected in the second and third quarter largely reflecting the volatility of the oil market and lockdown leading to plunge in demand.
With the MPC reducing the monetary policy rate to 12.5% and retaining other key parameters, the charge now is on government to monitor closely increasing global headwinds such as weak aggregate demand and rising corporate debt. Away from these external shocks, increasing the local revenue base through tax collection is a major contending issue as the purchasing power of many has been largely affected and a soar in unemployment rates.
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