From Nduka Chiejina (Asst Editor), Abuja
As Nigeria records a second quarter negative Gross Domestic Product(GDP) growth in the year, an academic has assured that the worst is over for Nigeria’s GDP performance in 2020.
President, Association of Capital Market Academics of Nigeria Prof Uche Uwaleke made this submission in Abuja on Monday after the release of the Q2 GDP report for the year.
Uwaleke, who is Chairman, Chartered Institute of Bankers of Nigeria, Abuja Branch, said: “I am also not surprised about the huge size of the contraction put at 6.10per cent.
‘’I think this is going to be the worst this year. A negative real GDP growth is also most likely to be recorded in Q3 2020 but the size will be smaller as the economy gets restarted and crude oil price gradually picks up.’’
He noted that “as a matter of fact, because it is based on year-on-year, when one considers the 2.12per cent positive real GDP growth this same period last year, the decline in GDP comes to as high as 8.22per cent”.
This, he said, “appears to be in line with global expectations as we have seen similar trends recently in countries like UK and Japan.”
Explaining why Nigeria’s Q2 GDP figures is in the negative, Uwaleke said: “It is easy to see why this happened. The negative impact of COVID’19 on health which resulted in lockdowns and supply chain disruptions.”
Other reasons he attributed to “the collapse in crude oil price and reduction in output in compliance with OPEC + agreement, the illiquidity in the forex market and the lingering insecurity in the country which affected agriculture output are to blame”.
This, he said explains why “the Agriculture sector managed to eke out a growth rate of 1.58%, and manufacturing, trade and so many other sectors recorded negative growth”.
The lockdown and movement restrictions really affected the Accommodation and food services sector which declined by as much as 40%.
“To ensure, the impact of these economic headwinds are moderated, it is important to increase the size of the various interventions by the government and the CBN and ensure they are well targeted and implemented” he urged government.