The Chairman of the Lagos State Chapter of the National Association of Microfinance Bank (NAMB), Mr. Omololu Fatunbi, has said that what is afflicting the Nigerian economy now is worse than recession as it is actually ‘stagflation’. Speaking in an interview with Financial Vanguard, Fatunbi said that the consistent drop in GDP for 3 quarters has elevated the crisis level of Nigeria’s economy from recession to stagflation.
“What we have is more than recession, what we have is stagflation, which is something higher than recession, with a consistent decline in GDP for three quarters, it is now more than recession.”
He went to describe the effect of this stagflation on small businesses and the financial sector at large, explaining that due to the decline in business activities, non-performing loans are on the rise which negatively affects the financial institutions.
Blaming government policies as well, the NAMB Chairman said government policies were not helping the inflation rate, which was resulting in further unemployment.
“Of course, that is what we are seeing, in the industry, what you see is that government policy is also having an effect because when inflation rate is going higher, that means what ordinarily you would have given N50, 000 to do the business, N100,000 would not be enough and much money would be chasing fewer goods and that is recess on the microfinance industry. Everything is at the lower ebb in the industry,” he lamented.