TO reduce the size of the economic recession below forecast global average of -3 per cent, it is important that the COVID-19 stimulus packages both by the government and the Central Bank of Nigeria (CBN) are well targeted and executed in ways that will protect jobs and speedily reverse the present downturn in economic activities.
Professor of Finance, Uche Uwaleke of the Nassarawa State University, Keffi, who stated this in reaction to the 1.87 per cent GDP growth for first quarter of 2020 said but for the oil sector, the economy would have been worse hit by coronavirus invasion.
“It is time to expand and scale up the interventions to cover more products and states of the Federation. The IMF has projected that the Nigerian economy will tank by -3.4 per cent this year.
“It is instructive to note that while the non-oil sector with over 90 per cent contribution to GDP managed to eke out a growth rate of 1.55 per cent, the oil sector grew by 5.06 per cent.
“By extension, the growth in Q1 2020 was powered by the oil sector that contributed just 9.5 per cent of GDP.”
According to him, oil may not rescue the economy again in 2020 given that the 2020 revised budget is based on 1.94 mbpd in tune with OPEC cut agreement.
“So, the oil sector’s real GDP growth rate will be negatively impacted in 2020.
“This is the more reason much attention should be shifted to the non-oil sector especially agriculture, health, education and the enabling infrastructure such as power, roads and ICT.
“Mechanised farming will go a long way in boosting food production.
“Doing so will bring down food inflation which was over 15 per cent as of April according to the NBS. Secondly, there is no doubt that the CBN’s interventions in agriculture, especially the anchor Borrower Scheme, has helped in no small measure to grow the sector.
“On the other hand, the sectors that recorded the highest drop included road transport and accommodation/hotel industry due in part to the movement restrictions and lockdown in many towns and cities in Nigeria.
“As a matter of fact, the drop in real GDP growth rate would have been more severe but for the moderating impact of the relatively greater tempo of economic activities in the month of January.”
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