The Minister for Finance, Budget and National Planning, Mrs. Zainab Ahmed, on Monday, November 23, 2020, said the country will exit recession by the first quarter of 2021 as the Nigerian government is working towards reversing the declining economic trend in the country.

According to Channels Television, this disclosure was made by Mrs. Zainab Ahmed while speaking on the latest GDP figures released by the National Bureau of Statistics (NBS) about the current recession in the country at the ongoing 26th Nigerian Economic Summit, organized by the Nigerian Economic Summit Group (NESG) and the Federal Ministry of Finance, Budget, and National Planning.

The Finance Minister said the COVID-19-induced recession followed the pattern across the world, where many countries had entered an economic recession.

Ahmed said, “Nigeria is not alone in this, but I will say that Nigeria has outperformed all of these economies in terms of the record of a negative growth.”

The country’s economy posted a second consecutive negative growth, contracting by 3.62% in the third quarter. This negative growth is much better than the 6.01% that was earlier forecasted by the NBS.

Also at the Economic Summit, Vice President Yemi Osinbajo, emphasized that the government is committed to working in synergy with the private sector to foster equitable growth and underpin national development.

The 26th Nigerian Economic Summit focuses on building resilient partnerships for Nigeria’s households, businesses, and the general economy.

What you should know

It can be recalled that on Saturday, NBS announced that the country had entered its second recession in 5 years in the third quarter of this year, as the Gross Domestic Product (GDP) fell for the second consecutive quarter.

According to figures released by the Nigeria Bureau of Statistics (NBS), cumulative Gross Domestic Product (GDP) for the first nine months of 2020, therefore, stood at -2.48%, just as it recorded a -6.10% in the second quarter.

Former Governor of Anambra State, Peter Obi, has said that Nigeria needs to trim the unnecessary expenditure on its budget and redirect the economy towards a production-based one. He also warned that that the current recession would be worse than that of 2016, because debt raised by the administration was not properly invested.

Peter Obi disclosed this in a social media statement on Sunday and in an interview with Channels TV.

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For Nigeria to pull itself out of this economic recession, the 2nd in the last 5 years, there's a compelling need to cut the pork out of the budget and expenditure at all levels of govt and redirect the economy from a wasteful consumption-based one to a productive economy. -PO

— Peter Obi (@PeterObi) November 22, 2020

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“For Nigeria to pull itself out of this economic recession, the 2nd in the last 5 years, there’s a compelling need to cut the pork out of the budget and expenditure at all levels of government and redirect the economy from a wasteful consumption-based one to a productive economy,” he said.

He mentioned in his TV interview that Nigeria should emulate other countries trying to pull out of the economic mess by concentrating on improving monetary and fiscal policies.

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He said that the October protests were signs that politicians needed to sit up in order to arrest the situation before it gets worse.

“Every other country is discussing the recession and how to pull their people out of poverty. So, what we should do now is concentrate on the monetary and fiscal policies to start pulling people out of poverty.

“If you see what happened with the recent protests, you could see that we are heading into a problem. And I want our energy to be concentrated on that problem. The politicians, the class where I belong, should do more seriously, across party lines, to be able to arrest the situation before it gets out of hand,” he said

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He also stated that priority should be on putting food on the table now instead of discussing the 2023 elections.

“For me, it is in discussing how do we put food on people’s table. Elections will come and we can see how to select the best. But let’s deal with the recession we have just entered before 2023.

“This recession is going to be worst than in 2016 because the monies we borrowed then were not properly invested.

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“What we need now is to go into a vigorous regime of formulating implementable and measurable monetary and fiscal policies to drive ourselves out of the present situation,” he said.

What you should know 

Nairametrics reported that Nigeria’s Gross Domestic Product (GDP) in real terms declined by -3.62% (year-on-year) in Q3 2020, thereby marking a full-blown recession and second consecutive contraction from -6.10% recorded in the previous quarter (Q2 2020).

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Former Vice President of Nigeria, Atiku Abubakar, had warned that Nigeria must stop borrowing for anything other than essential needs. He added that very non-essential line items in the proposed 2021 budget must be expunged in a bid to kick-start the economy from a recession.

Former Vice President of Nigeria, Atiku Abubakar has warned that Nigeria Nigeria must stop borrowing for anything other than essential needs, he also added that very non-essential line items in the proposed 2021 budget must be expunged and others in a bid to kick start the economy from a recession.

Atiku disclosed this in a social media statement on Sunday, titled: “We Must Exit This Recession With Precision”.

Atiku said he received confirmation of Nigeria’s slide into recession for the second time in five years with a heavy heart. He urged that the poor economic environment could have been avoided if his ideas of cutting costs of governance were incorporated.

“This could have been avoided had this administration taken heed to patriotic counsel given by myself and other well-meaning Nigerians on cutting the cost of governance, saving for a rainy day, and avoiding profligate borrowing.

“Yes, the COVID-19 pandemic has exacerbated an already bad situation, however, we could have avoided this fate by a disciplined and prudent management of our economy.

” It serves no one’s purposes to quarrel after the fact. We must focus on solutions. Nigeria needs critical leadership to guide her back to the path of economic sustainability,” he said.

Atiku warned that Nigeria’s proposed 2021 budget is no longer feasible as the Federal Government does not have the budget to afford heavy luxuries. He, therefore, urged the government to expunge every non-essential line items from the budget.

“We must act now, by taking necessary, and perhaps painful actions. For a start, the proposed 2021 budget presented to the National Assembly on Tuesday, October 8, 2020, is no longer tenable.

“Nigeria neither has the resources, or the need to implement such a luxury heavy budget. The nation is broke, but not broken. However, if we continue to spend lavishly, even when we do not earn commensurately, we would go from being a broke nation, to being a broken nation.

“As a matter of importance and urgency, every non-essential line item in the proposed 2021 budget must be expunged.

“For the avoidance of doubt, this ought to include estacodes, non-emergency travel, feeding, welfare packages, overseas training, new vehicle purchases, office upgrades, non-salary allowances, etc,” Atiku said.

The former Peoples Democratic Party presidential candidate added that the budget must focus on essential items including human development investments and policies that increase the purchasing power of Nigerians.

” Nigeria ought to exclusively focus on making budgetary proposals for essential items, which include reasonable wages and salaries, infrastructural projects, and social services (citizenry’s health, and other human development investments)”

” Additionally, we have to stimulate the economy, by investing in human development, and increasing the purchasing power of the most vulnerable of our population. Only a well-developed populace can generate enough economic activity for the nation to exit this recession.”

Atiku called on a monthly stimulus package to poor Nigerians which he adds should be funded not by debt but by adding a 15% tax to luxury purchases.

He said, ” For example, a stimulus package, in the form of monthly cash transfers of ₦5000 to be made to every bank account holder, verified by a Bank Verification Number, whose combined total deposit in the year 2019 was lower than the annual minimum wage.

” How will this be funded? By more profligate borrowing? No. I propose a luxury tax on goods and services that are exclusively accessible only to the super-wealthy. A tax on the ultra wealthy to protect the extremely poor.

“A practical approach to this is to place a 15% tax on all Business and First Class tickets sold to and from Nigeria, on all luxury car imports and sales, on all private jets imports and service charges, on all jewellery imports and sales.”

“And above all, Nigeria must stop borrowing for anything other than essential needs. Again, for the avoidance of doubt, borrowing to pay salaries, or to engage in White Elephant projects, is not an essential need.

“If we keep borrowing, we stand the risk of defaulting, and that will make recession a child’s play because we will lose some of our sovereignty.

What you should know 

Nairametrics reported that Nigeria’s Gross Domestic Product (GDP) in real terms declined by -3.62% (year-on-year) in Q3 2020, thereby marking a full-blown recession and second consecutive contraction from -6.10% recorded in the previous quarter (Q2 2020).