Nigeria’s economy could, in a worst-case-scenario in the absence of any stimulus package, shrink to as much as 8.9 percent in 2020.
This was disclosed by the Minister of Finance, Budget and National Planning, Zainab Ahmed.
According to Ahmed, Nigeria could plunge into a deeper recession than forecast after oil prices fell due to the coronavirus pandemic.
While speaking during a virtual meeting of the National Economic Council, Ahmed disclosed that in the best-case scenario, the economy could contract to about 4.4% without any fiscal measures. But with a stimulus, the shrinkage could be managed at 0.59%
She added that the crisis would heighten the poverty level beyond 40% of the country’s population.
Ahmed admitted that a recession was unavoidable but assured that it would be well-managed.
She said, “We will go into recession but what we are trying to do is to make sure that it is shallow so that we will quickly come out of it, come 2021.”
A representative of the World Bank, who participated in the virtual meeting, disclosed that the bank was planning an immediate fiscal relief package for Nigeria.
According to the minister, the proposed fiscal relief package worth about $1.5 billion would probably be disbursed by September to state governments to provide relief at sub-national levels.
She said Nigeria missed its revenue target by 31 percent after it realized N940.9 billion from crude oil sales in the first quarter as oil prices continue to fall.