Notable economist and adviser to the Federal Government, Bismarck Rewane, on Monday said the latest Nigeria Bureau of Statistics report on the economy should push the country to start “doing some things differently.”
Nigeria’s Gross Domestic Product (GDP) decreased by six percent in real terms in the second quarter of 2020, the NBS said Monday morning.
According to Rewane, the decline was “surprising and concerning” but not “alarming at this point in time.”
“The truth is that the economy had its pre-existing conditions in Q1 and the lag between the slow down and the contraction was underestimated by all analysts,” Mr Rewane said in an interview with Channels Television on Monday.
He pointed out that the Federal Government’s stimulus plan for the economy was inadequate to cover for the shortfall recorded by the NBS.
“We have a N2.5trn equipment to fight a 12trn contraction,” he said. “So the limitations and inadequacies and inappropriateness of the tools, compared to the problem we have, is stacked.
“So we are saying that the move from a slowdown into a contraction was more than we expected. The tools that we have at our disposal are inadequate. The stimulus that is required to take us out of this equation is going to be much more than we expected. And we are going to have to take some measures.”
Mr Rewane added that the country was now faced with a quadrilemma, a situation in which a choice must be made between four undesirable options.
“The first variable we are looking at is recession, negative growth,” he said. “The second variable is high inflation, which is almost 13 percent.
“The third variable is high unemployment; even though the unemployment numbers are at 28 percent, we think that it is much more than that. And finally, we have weaknesses in currency.
“So we are having external weaknesses and vulnerabilities, slow growth, high unemployment, and, more than anything else, contraction in economic activity.
“Now we are going to move away from the monetary policy complement that we have, stimulate the economy with greater catalyst, and do some things differently.”