Nigeria was particularly hard hit by the oil price shock since it lacked any other large source of money to compensate for the drop in oil exports. The problem was exacerbated by sabotage of oil export facilities in the Niger Delta, which lowered government revenue and export earnings even further. Lack of fiscal buffers to absorb the shock, as well as leakages of public funds owing to corruption and wasteful spending in the recent past, all limited the amount of government spending. The reduction in oil prices generated capital outflows and, as a result, a loss in the value of the Naira, raising the cost of imported goods and services.
To save the country from catastrophic collapse, the Economic Recovery and Growth Plan (ERGP) was eventually announced. Nigeria has finally emerged from its economic recession, according to the CBN, after a 0.11 percent gain in GDP in 2020. According to the National Bureau of Statistics (NBS), the Nigerian economy grew by 5.01 percent in real GDP in the second quarter of 2021, and the economy is expected to increase by 2.9 percent in 2022.
The present administration decided to implement some protectionism measures in 2019 in order to stimulate domestic production by closing the country’s key borders. Despite the partial reopening of the borders, other protectionism measures such as import quota restrictions, limited access to foreign currency, and increased trade tariffs remain in place. Since a result of the program, the rate of inflation in the commodity market has risen, as local production has been unable to keep up with the enormous amount of domestic demand. The average inflation rate for 2021 is around 17%, compared to 11.02 percent before to the period of border closure, implying that the spillover effect of the border closure is still present.
The advent of the Covid-19 pandemic in the year 2020 significantly deteriorated the country’s economic predicament. Following a lockdown that began in March 2020, Nigerians, like the rest of the world, were deeply affected by the Covid-19 epidemic. By the end of 2020,
Nigeria entered the pandemic’s second wave, which resulted in a surge in the number of persons affected. To stop the spread, the authorities outlawed all social meetings, including religious gatherings. Schools and offices were closed, and religious groups were temporarily prohibited. By January 2021, a number of research institutions had begun to distribute the vaccine they had determined to be the long-awaited solution to the deadly pandemic. Nigeria gradually relaxed mobility and reopened its borders once the vaccine was sent out in phases.
The Nigerian naira was traded for N361 per dollar at the conclusion of the epidemic, and more recently for N413 per dollar, as inflation rose to 17%, and low demand for oil as a result of the limited movement further curtailed oil output and export, lowering revenue produced. To mitigate the effects of the epidemic, various fiscal and monetary strategies were implemented. Despite these efforts, empirical and statistical data shows that Nigeria has yet to fully recover from the economic shock caused by the Covid-19 outbreak, which knocked the country’s economy off balance.
2021: Is Nigeria still in recession?
In 2020, the Nigerian economy entered a new recession, reversing three years of progress following the 2016 recession.
Containment measures against COVID-19, which harmed aviation, tourism, hospitality, restaurants, manufacturing, and trade, and so disrupted the global economy, triggered the 2020 recession. The GDP shrank by 3.6 percent in the third quarter after contracting by 6.1 percent in the previous quarter.
The country had left recession once more by the end of the year. The Nigerian economy in 2021 was shaped by the confirmation of the end of the recession, as well as other significant happenings.
Is Nigeria currently experiencing a downturn?
According to the World Bank, the economy of Sub-Saharan Africa will contract by 2.1 percent in 2020, and by 5.1 percent in 2025. Nigeria’s economy, meanwhile, has officially entered a recession for the second time in the previous five years.
What is the state of the Nigerian economy right now?
Nigeria’s Economic Development A possible sharper-than-expected decline in China, as well as a low immunization rate amid continuing Covid-19 uncertainty, darken the prognosis. GDP growth is expected to be 2.8 percent in 2022, up 0.1 percentage points from last month’s prediction, and 2.8 percent in 2023, according to FocusEconomics.
What will the Nigerian economy look like in 2021?
Nigeria’s GDP grew at its quickest annual rate in eight years in 2021, owing to a shift away from oil.
The National Bureau of Statistics reported Thursday that the Gross Domestic Product increased by 3.40 percent last year, the greatest since 2014, when it increased by 6.22 percent.
The economy grew faster than the administration had predicted. While the Ministry of Finance forecasted a growth rate of 2.5 percent for the year, the Central Bank of Nigeria forecasted a rate of 3.1 percent.
When compared to the two preceding quarters, growth in the final quarter of the year was the smallest. Between October and December of 2020, GDP grew 3.98 percent, somewhat slower than the 4.03 percent growth rate recorded in the third quarter and the 5.01 percent growth rate recorded in the second quarter.
While weaker, the fourth quarter increase was the nation’s sixth consecutive quarter of positive growth since the Covid-triggered recession in 2020, which followed economic contractions of -6.10 percent and -3.62 percent in the second and third quarters of that year.
What will the unemployment rate in Nigeria be in 2021?
According to a report by credit rating firm Agusto & Co., Nigeria’s jobless rate increased to 35% in 2021.
While the National Bureau of Statistics (NBS) has yet to release official labor data for the period, Agusto & Co’s 35 percent indicates that the jobless rate in Africa’s largest economy increased 6.06 percentage points from 33.3 percent in 2020, when the impact of the COVID-19 pandemic forced businesses to lay off staff.
Why is Nigeria’s economy stagnant?
Many structural difficulties limit Nigeria’s economic potential, including insufficient infrastructure, tariff and non-tariff trade barriers, investment barriers, currency valuation uncertainty, and limited foreign exchange capacity.
Its economic stability depends on sustained broad-based economic growth and poverty reduction. The United States Agency for International Development (USAID) backs the government’s efforts to reduce poverty through increasing agricultural output and creating jobs in rural areas. It also seeks to promote market access, increase energy supply, remove trade barriers, and expand access to safe drinking water. We assist in the creation of a policy climate that is friendly to small enterprises, as well as expanding access to market-driven vocational and technical training that is related to private-sector job possibilities. Access to commercial financial services, particularly microfinance, is also a priority of US assistance.
When did Nigeria emerge from its economic slump?
According to the World Bank, Nigeria emerged from recession earlier than expected in its October 2020 Sub-Saharan Africa estimate (SSA).
Despite a rise in oil prices, Nigeria’s oil sector suffered in the fourth quarter of 2020, according to the bank’s newest Africa Pulse Report for April 2021, titled ‘COVID-19 and the Future of Work in Africa: Emerging Trends in Digital Technology Adoption.’
Nigeria emerged from its second recession in five years with a 0.11 percent growth in February 2021, according to the National Bureau of Statistics (NBS).
How did Nigeria emerge from the recession?
Nigeria’s strong private sector defied expectations and took advantage of opportunities given by the coronavirus epidemic through technology and remote labor, helping the economy to emerge from recession in the fourth quarter with 0.11 percent growth.
Foreign exchange pressures, relatively lower oil prices and production, subdued global demand, spiraling consumer prices, repressed purchasing power, heightened unemployment levels, weak investor confidence, worsened insecurity, and social tensions are all concerns about the country’s structural problems.
According to figures released by the National Bureau of Statistics (NBS) yesterday, the country’s Gross Domestic Product (GDP) increased 0.11 percent from a year ago in the three months through December, compared to a fall of 3.6 percent in the third quarter.
Nigeria has been in recession how many times?
Nigeria’s economy has entered its second recession in five years, with the country’s gross domestic product contracting for the second quarter in a row.
According to the National Bureau of Statistics, the nation’s GDP grew at a negative rate of 3.62 percent in the third quarter of 2020.
In the second quarter, the country’s economy contracted by 6.10 percent.
It’s the country’s second recession since 2016, and the country’s worst downturn in nearly four decades.
The coronavirus pandemic has wreaked havoc on Nigeria’s economy, causing a large drop in oil earnings and halting global economic activity for months.
Despite contributing less than 10% to Nigeria’s GDP, crude oil accounts for approximately 90% of the country’s foreign exchange profits. According to the most recent statistics, it contributed only 8.73 percent to the economy.
According to Bloomberg estimates, oil production fell to 1.67 million barrels per day from 1.81 million barrels the previous quarter, the lowest since the third quarter of 2016, when the country was last in recession.
If the spread of COVID-19 is contained by the third quarter, the Nigerian economy will fall by 3.2 percent in 2020, according to the World Bank. The International Monetary Fund predicts a 4.3 percent decrease.
Is Nigeria economically sound?
Nigeria is a 36-state federation with the Federal Capital Territory that is multi-ethnic and culturally diverse. The ruling All Progressives Congress (APC) controls the executive branch of government and retains a majority of seats in both the Senate and the House of Representatives in parliament, as well as 23 of the 36 state governorships.
In the 2019 presidential elections, Muhammadu Buhari was re-elected to a second term. In February 2023, general elections will be held. The fight against the Boko Haram terrorist organisation in the northern states, as well as incidences of banditry and kidnappings in the north-west and persistent turmoil in the southeast due to separatist agitations, have impacted the security environment since 2011.
Nigeria went into its severe recession in two decades in 2020, but growth returned in 2021 when pandemic restrictions were removed, oil prices recovered, and the government launched plans to counteract the economic impact. Nigeria was particularly vulnerable to COVID-19’s worldwide economic disruption, which was exacerbated by the drop in oil prices. Over 80% of exports, a third of banking sector loans, and half of government revenue come from oil. In 2018, 40% of Nigerians (83 million people) were poor, and another 25% (53 million) were vulnerable. In the years 201923, the number of Nigerians living in poverty is predicted to climb by 12 million.
In 2020, the government implemented long-awaited policy adjustments as part of its COVID-19 reaction. It did this by: I beginning to harmonize exchange rates; (ii) initiating reforms to eliminate gasoline subsidies; (iii) adjusting electricity tariffs to more cost-reflective levels; (iv) reducing non-essential spending; and (v) improving debt management and increasing transparency in the public sector, particularly in the oil and gas sector.
Nigeria’s labor market is still being disrupted by the COVID-19 problem. While it has now surpassed pre-pandemic levels, the gains have been mostly attributable to workers shifting to small-scale, non-farm entrepreneurial activities such as retail and commerce, which have unstable revenue streams.
Nigeria’s economic prospects are still bleak. The timing of immunizations and the duration of COVID-19 remain unknown. Furthermore, the modest planned rebound could be jeopardized by oil sector instability, including an unexpected shock to oil prices, as well as banking sector problems. Even in the most favorable global environment, Nigeria’s policy response will be critical in laying the groundwork for a strong recovery.
Inequality in terms of income and opportunities is still high, and it has hampered poverty reduction efforts. High poverty levels, regional inequality, and social and political turmoil are all caused by a lack of job possibilities. High inflation has had a negative impact on household welfare, and high prices in 2020 are expected to push another 7 million Nigerians into poverty.