The International Monetary Fund (IMF) has projected that Nigeria’s economy will recede by 3.4 per cent in 2020 due to the COVID-19 pandemic that has disrupted global supply chains.
“This would be the worst recession in 30 years, and the second recession in five years, following closely after a negative economic growth of 1.51 per cent in 2016,” the IMF said.
In 1987, Nigeria’s economy receded by -10.87 and -0.6 in 1991. The Fund stated this in its April 2020 World Economic Outlook report released, yesterday, in Washington DC, USA.
IMF Chief Economist and Director of Research Department, Gita Gopinath, said the recession to be experienced would be the worst since the Great Depression that occurred between 1929 and 1932 when advanced economies shrunk by 16 per cent. It is projected that the Nigerian economy will rebound by 2.4 per cent in 2021. “For the first time since the Great Depression, both the advanced economies, emerging and developing economies are in a recession,” she said in a press briefing that marked the beginning of the April 2020 Spring Meetings holding on virtual platform. “For 2020, growth in advanced economies is projected at -6 per cent. Emerging markets and developing economies which typically have normal growth levels well above advanced economies are also projected to have negative growth of -1 per cent and -2.2 per cent if you exclude China.”
Gopinath also said the fund has projected 170 countries across the world would experience a shrinkage in their income per capita.
The economist said the recovery in 2020 would be partial and the projections provided in the report is the baseline scenario.
Meanwhile, the Nigeria Labour Congress (NLC) has pleaded with IMF and the World Bank to reconsider its decision to exclude Nigeria among countries that will benefit from special debts relief package to mitigate the impact of COVID-19 pandemic. At its Executive Board Meeting on April 13, the IMF excluded Nigeria from 25 countries to benefit from its debts relief package targeted at addressing the impact of the COVID-19 pandemic under the Catastrophe Containment and Relief Trust (CCRT), while this week, the World Bank also announced plans to roll out $160 billion in emergency aid to countries impacted by COVID-19, including $14 billion in debt repayments to governments owed by 76 poor countries.
The NLC in its reaction to the relief package from the two global financial institutions noted that Nigeria needed financial support now. “While the Congress applauds the goodwill by the IMF and World Bank, we wish to express our displeasure that Nigeria was excluded from the list of benefitting countries. We call for the inclusion of Nigeria in the beneficiary list for the COVID-19 related debt relief and debt moratorium based on very cogent reasons,” said NLC president, Ayuba Wabba.
The result is that many countries are desperately in search of funds to cope with rising health emergencies, especially with regards to the supply of life supporting medical equipment, wears and drugs.