NECA Urges More Aggressive Actions to Shore up GDP Growth

Chris Uba

The Nigeria Employers’ Consultative Association (NECA) has stressed the need for the fiscal authorities to develop a more aggressive and decisive policies to sustain an economic recovery in the wake of declining oil prices.

This, it said, would require a more coordinated stimulus packages targeted at the worst-hit sectors to sustain the economy from experiencing contraction of 8.9 per cent as predicted.

The NECA’s position, which was contained in a statement yesterday, is a reaction to the announcement made last Thursday by the Minister of Finance, Zainab Ahmed, that Nigeria’s economy could shrink as much as 8.9 per cent in 2020 in a worst-case scenario without stimulus-a deeper recession than forecast after oil prices plunged due to the coronavirus pandemic.

Ahmed told the National Economic Council that the contraction could reach 4.4 per cent in a best-case scenario, without any fiscal measures.

But with stimulus, the contraction could be kept to just 0.59 per cent, she said, adding that the pandemic and an oil price plunge have not only hit growth but also dented the state main source of income, creating large financing needs and weakening the naira.

Nigeria’s economy, like every other economy in the world, is faced with grave threat, most especially oil dependenteconomies, an indication of the headwinds the economy is facing from the coronavirus pandemic and low crude prices, reflecting in the fall in government revenue.

Nevertheless, the country’s economic growth as released by National Bureau of Statistics (NBS) indicated an expansion by 1.87 per cent in the first quarter of the year, compared with growth of 2.55 per cent in the previous quarter.

The slowdown in the GDP growth reflects the earliest effects of the disruptions on non-oil economy, coupled with an escalating war of words between the United States and China which resulted in low demand in global oil product.