CBN Dismisses Governors’ Claims of Pending Economy Recession

The Central Bank of Nigeria (CBN) Tuesday asked the public to disregard the claims by state governors that the economy might relapse into recession in 2020.

Chairman of Nigeria Governors Forum (NGF) and Governor of Zamfara State, Abdulaziz Yari, Monday, warned that Nigeria could be heading into another round of recession.

He made statement at the the opening ceremony of the induction programme for newly-elected and returning governors put together by NGF Secretariat, at the State House Conference Center, Abuja.

Yari warned incoming governors to be prepared for the possibility of another cycle of recession by the mid-2020 to third quarter of 2021.

Yari said the outgoing governors have agreed that borrowing is never a reliable alternative to solving economic problems and has urged the incoming ones and other ties of government to multiply revenue generation bases so as to change the course of doing government business for the betterment of the people.

“On our part, we made a lot of achievements in infrastructural development and provision of social services because we enjoyed a relatively high oil price of about $100 to $114 per barrel between 2001 and the middle of 2014.

“However, by the mid-2014, the price of crude oil, which is sadly the main driving force of government’s expenditure, dropped to $75 per barrel.”

Meanwhile, CBN Deputy Governor Economic Policy Dr. Joseph Nnanna, who represented the CBN Governor Godwin Emefiele, at the public presentation of the Spring 2019 edition of Regional Economic Outlook (REO) by International Monetary Fund (IMF) in Abuja on Tuesday, dismissed the governors’ claims.

He said: “We are making smooth progress towards growth and by end of 2019, all things being equal, we are going to likely have between 2.8% and 3% GDP growth rate.

“Since the third quarter of 2016, when we started coming out of recession, we have embarked on tight monetary policy in all its ramifications.

“Right now, we are on the path of achieving our price stability goal of single digit inflation.

“Are we going to witness increased inflation or are we sliding back into recession? My answer is no. But is that adequate?

“My answer is no. 3% GDP real growth rate is not enough for Nigeria where our population growth rate is 3.2%.

“Per capita growth rate is still negative but definitely, we are not going through the era of 2016 when we had a recession. That won’t happen hopefully. Not under CBN watch.”

The major problem afflicting the labour sector, Nnanna said, is more of underemployment than outright unemployment “because majority of Nigerians are employed one way or another but they are functioning below capacity.

“They are engaged in the informal sector which is not performing optimally. We also have a huge infrastructure deficit.

“Infrastructure is the major constrain to economic development and growth. This has to be repaired.”

He urged the governors and other policy makers to tackle the menace of non-inclusive growth because “it is inclusive growth that we need in Nigeria than any other thing.”

Author: News Editor

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