CBN governor warns the Country against Economy Recession

Mr Godwin Emefiele

 The Monetary Policy Committee of the Central Bank of Nigeria has warned that the country’s economy could slip into recession next year if proactive steps were not taken by the Federal Government to revive key sectors”.

   A Financial analyst who was invited by a TV station expatiated on the topic stating that sectors that could be affected includes the power ,manufaturing,educaton,financial sectors.

Symptoms that brought about the projection;
The CBN and keen watchers of the economy are aware that the National Bureau of Statistics, NBS, announced that our Gross Domestic Product, GDP, grew by 2.35 per cent in the second quarter of this year – which ended in June. It was the second quarter in a row that the economy will record less than budgeted performance. Incidentally, 2.35 per cent growth, when the population continues to grow at close to 2.85 per cent, means that the average Nigerian is getting poorer

The economy grew at 6.54 per cent in the second quarter of 2014; the growth dropped to 2.35 per cent this year. The final year projection for 2015 is expected to be 2.63 per cent compared to 6.22 per cent last year. Last year, we were strongly listed on the JPMorgan index, enabling Nigeria to obtain loans/credit at favourable rates. Now, we are out of it; and the country will pay more to borrow.

The Treasury Single Account (TSA) policy imposed on banks by the Buhari  administration is already having its predictable effect. Liquidity is low in the banking sector and interest rates are escalating – portending lower investments. Foreign investors are divesting from the Nigerian Stock Exchange (NSE) and crude oil prices are likely to remain low for the whole of 2016.