As a result of the Covid-19 pandemic and the fall in oil prices, Nigeria officially entered a recession, following a decline of 3.62% of GDP in the third quarter of 2020, following a decline of 6% in the previous quarter. Africa’s most populous country barely recovered from the recession in 2016, following the collapse in oil prices in 2015.
as reported from Lagos, Liza Fabbian
This is the second time in four years that Nigeria has entered a recession. The decline in oil production continues in the country, which noted a decline in growth for the second quarter in a row.
During the third quarter of 2020, oil production fell further, from 1.8 million barrels to 1.67 million. That was almost 2 million barrels before the Covid-19 crisis.
A catastrophic situation for the Treasury, whose oil accounts for half of the revenue, and for the private sector, whose activities are largely dependent on imports.
This situation will certainly put further brakes on investment in health care, as the number of unemployed is exploding in Nigeria, especially among young people, who make up the majority of the population of the most populous country in Africa.
In an attempt to deal with the crisis, the authorities have already taken action elimination of some of the historical subsidies on the price of petrol. The oil industry reforms are also on the table.
According to IMF forecasts, the Nigerian economy is expected to hit 4.3% this year, but the government is more pessimistic and plans a decline of 8.9% – an unprecedented situation for 40 years.