The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has called on the Federal Government to urgently implement policies to prevent Nigeria falling into a third recession by the end of 2022, noting that the declining trend in the nation’s economic growth is worrisome.
National President, NACCIMA, Ide J. C. Udeagbala, gave the warning yesterday, in Lagos, at a press briefing to review the state of the economy and NACCIMA’s position on issues and policies.
Recall that Nigeria recorded a recession in 2016, followed by a second recession in 2020 occasioned by the COVID-19 pandemic, which caused a significant decline in oil revenues as global economic activities stalled for months.
A recession occurs upon two consecutive quarterly negative growth of Gross Domestic Product (GDP).
Udeagbala noted that the Nigerian economy grew by 3.98% in the fourth quarter of 2021, a drop from 4.03% in the third quarter, and 5.01% in the second quarter of 2021.
His words: “We emphasize this slight but continuous drop in growth rate even as we acknowledge that the Nigerian economy bounced back from the COVID-19 pandemic in the fourth quarter of the year 2020 to reach the peak growth rate for the period, of 5.01% by mid-2021.
“This declining trend is most concerning to us, as we consider that statistics on GDP is three or four months behind the present day, therefore, we estimate that the growth rate of National Output for the first three months of 2022 has decreased further considering the state of conflict in Europe which has had a negative impact on energy and food prices.
“It is the position of our Association that there is a very urgent need for policy implementation to avert a third recession of this decade by the end of 2022, even as the World Bank projects that the Nigerian economy will grow by 4.1% this year.”
The NACCIMA president further stated: “The Nigerian economy is operating below its productive capacity, as reflected in the high unemployment rates; we are struggling to meet our economic development objectives; as the growth of national output falls below our population growth; the economy is still heavily import dependent for consumption and production; and dependent on crude oil for government revenues and foreign exchange.
“As crude oil can no longer meet government demands for revenue, we are falling into a dependency on foreign debt to run. We need to turn around and reposition the National direction.”
He called on the legislative and executive arms of government to work together by taking urgent steps to reverse the current trend of increasing public debt and declining economic growth.
“The strategy of funding increasing government recurrent expenditure through public debt and the introduction of new taxes only provide short-term benefits in exchange for long-term negative impact,” he added.
