Shrinking Economy: Nigeria’s Situation Better Than Others, Says Presidency
The Presidency on Wednesday reacted to the National Bureau of Statistics’ second quarter 2020 Gross Domestic Product estimates which was published on Monday, giving itself thumbs up.
The NBS had disclosed that the nation’s GDP declined by 6.10 per cent (year-on-year) in real terms in the second quarter of 2020, ending the three-year trend of low but consistently improving positive real growth rates recorded since the 2016/17 recession.
Consequently, for the first half of 2020, real GDP declined by 2.18 per cent year-on-year, compared with 2.11 per cent recorded in the first half of 2019.
Key players in the nation’s economy, including the Manufacturers Association of Nigeria and the Lagos Chamber of Commerce and Industry had said the government might not be able to service rising debts and fund budgets as the economy shrunk by 6.1 per cent.
But the Special Adviser to the President on Media and Publicity, Femi Adesina, in a statement titled “Our response to Quarter 2, 2020 NBS figures, by Presidency,” said the overall decline of 6.1 per cent (for Q2 2020) and -2.18 per cent (for H1 2020) was better than the projected forecast of -7.24 per cent as estimated by the NBS.
He said the figure was also far better than many other countries recorded during the same quarter.
The presidential spokesman added that despite the observed contraction in economic activity during the quarter, it outperformed projections by most domestic and international analysts.
He said it also appeared muted compared to the outcomes in several other countries, including large economies such as the US (-33 per cent), UK (-20 per cent), France (- 14 per cent), Germany (-10 per cent), Italy (-12.4 per cent), Canada (-12 per cent), Israel (-29 per cent), Japan (-8 per cent), South Africa (projection -20 to -50 per cent), with the notable exception of only China (three per cent).
The statement read, “The government’s anticipation of the impending economic slowdown and the various initiatives introduced as early responses to cushion the economic and social effects of the pandemic, through the Economic Sustainability Programme contributed immensely to dampening the severity of the pandemic on growth.
“On the fiscal side, a robust financing mechanism was designed to raise revenue to support humanitarian assistance in addition to special intervention funds for the health sector.
“Adjustments to the national budget as well as emergency financing from concessional lending windows of development finance institutions were critical in supporting governments’ capacity to meet its obligations.
“On the monetary side, moratorium on loans, credit support to households and industries, regulatory forbearance and targeted lending and guarantee programmes through NIRSAL were some of the measures implemented in response to the pandemic during the second quarter.
“It is equally worth noting that since the start of the third quarter, the phased approach to easing the restrictions being implemented centrally and across states have resulted in a gradual return of economic activity, including the possibility of international travel.”
Adesina added that the anticipated health impacts of the pandemic had been managed without overwhelming the health infrastructure, which would have further compromised the ability to re-open the country to travel, commerce and international trade.
This, he further explained, had provided greater confidence and ability for authorities to initiate the conduct of nationwide terminal examinations in schools and resumption of the next academic year.
The presidential spokesman said while it is anticipated that the third and fourth quarters would reflect continued effects of the slowdown, the fiscal and monetary policy initiatives being deployed by government in a phased process would be a robust response to the challenges posed by the COVID-19 pandemic.