By Philip Yatai
Some economic experts in Kaduna on Friday expressed divergent views about the probability of Nigeria sliding into recession.
The experts spoke to the News Agency of Nigeria (NAN) against the backdrop of current global economic challenges occasioned by various factors.
Although arguing along parallel lines, the analysts, however, concurred that the state of health of the Nigerian economy was not too exciting.
They therefore urged the Federal Government and all stakeholders to redouble efforts in the struggle to move the country from its present position, to the type dreamt of by all Nigerians.
One of the respondents, Mr Yusuf Goje, a Finance Analyst, said even if there was a faint light of hope down the tunnel, there was an overriding probability of the country sliding into recession.
Goje enumerated the danger signals that influenced his stand on the matter, to include the fall in the country’s oil production, its price, and inflation.
He also observed that insecurity, natural disasters like flood, depleting foreign reserves and high debt servicing, among others, were further straining the nation’s economy and slowing down growth.
He pointed out that the country’s crude oil production had dropped from 1.24 million barrels per day in July, to 937,766 barrels per day, as at Oct. 10.
He added that the dwindling prices of oil internationally had further weakened the nation’s economic status, thereby making it highly volatile to economic shocks.
He described the development as a very serious issue considering that oil was the major source of revenue for the country.
According to him, as it is now, Nigeria does not have any form of immunity garb to economic shocks, adding that any such shocks, no matter how slight, can easily push the country into recession.
“Apart from the fall in the production and the dwindling price of oil, there is also the problem of depleting foreign reserves, with high exchange rate, in relation to the Dollar.
“Not only that, a substantial amount of our budget is going to debt servicing, just as the country is experiencing a disturbing spiral inflation.
“All these are signs that recession is imminent in Nigeria, as such the authorities concerned must fast-track remedial efforts to avert the looming danger”, he warned.
On the contrary, Dr Peter Adamu, an Economist with the Kaduna State University (KASU), told NAN that considering the nation’s GDP growth rate, recession was not likely anytime soon.
Adamu explained that a country would have to experience negative growth for six months before it would be considered to be in recession.
“The recent data by the Nigeria Bureau of Statistics (NBS) shows a positive side of growth, which suggests that recession is not likely going to happen anytime soon”, he insisted.
Adamu, however, aligned himself with Goje’s argument on the high inflation rate of above 20 per cent, which he said had eroded the purchasing power of average Nigerians.
“This is bad because there is no deliberate fiscal policy in the country’s budget to increase the purchasing power of the people”, he added.
He equally said that flooding and insecurity were also taking their toll on the economy, stressing that the government must do something to address those challenges to avert further weakening of the economy.
“Flooding and insecurity have negatively impacted on the agriculture sector at the moment, and analysts are already predicting that there will be food insecurity, but we hope not,” he said.
On his part, Terhemba Wuam, a Professor of Economic History, KASU, pointed out that anticipated paucity of financial resources would affect the functioning of key economic sectors.
According to him, the development will expose the country to economic shocks, thereby creating a scenario of negative economic growth that may expose the country to recession.
Wuam said another serious challenge, was inflation, which had continued to escalate from year to year, thereby, diminishing the purchasing power of the Naira, and slowing down economic growth.
“It is very clear that any failure to raise the needed revenues to fully implement economic and social sector programmes will negatively affect the welfare and prosperity of Nigerians,” he said. (NAN)
